Investing.com – China’s property giant Evergrande Real Estate Group Ltd (HK:3333) is reportedly in talks with financial institutions to raise $1.5 billion in October by offering its Hong Kong office tower as collateral, according to Reuters, citing two sources with knowledge of the matter.
Evergrande’s shares slumped 4.33% to HK19.02 on Tuesday morning on the news.
The company is said to be planning to use the funds raised from financing the tower to pay back its offshore debts, which amounted to $16.4 billion as of the end of June, and to make dividend payments.
Evergrande purchased the office tower in Wan Chai for $1.6 billion in 2015 from Chinese Estates Holdings (HK: 0127). The company has not yet fully paid off the tower, as it agreed to pay in installments to Chinese Estates within 6 years of the sale.
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