PAG agrees to buy control of Evergrande’s property services arm for about $514 million

Liquidators of China Evergrande Group have agreed to sell a controlling stake in its property management arm to investment firm PAG for HK$4.03 billion, or US$513.6 million².

The deal covers a 51.016 per cent stake in Evergrande Property Services².

Other accounts put the price at $513.7 million or $514 million, reflecting different currency conversions of the same HK$4.03 billion figure^6,7.

The liquidators are seeking to recover assets for creditors owed US$46 billion².

The sale has been described as a rare win for creditors¹.

The agreement was reached by the liquidators now running the wind-down of the former developer, as part of the process of selling its assets^3,5.

Why it matters to investors

Evergrande Property is a key profitable unit, and its sale comes as Evergrande goes through liquidation³.

The business was first put up for sale in 2021³.

That was the year Evergrande defaulted on significant debt obligations, after being one of the symbols of China’s real estate market⁴.

Evergrande was once the face of the country’s property sector, riding a decades-long boom as it sold home-ownership dreams⁵.

Its collapse was by far the biggest in a real estate crisis that dragged down the sector⁶.

The unit’s own recovery has been hampered: its parent used billions of yuan of the unit’s bank deposits as collateral for loans, leaving the company struggling to recover the money².

The deal could give the profitable business a new controlling shareholder².

A price of about $514 million for a 51 percent stake covers a small fraction of the $46 billion owed to creditors^2,7.

What to watch

The sale is part of the liquidators’ wider effort to recover assets for creditors, and further disposals would show what other parts of the group can fetch^2,5.

Completion of the PAG deal would hand control of Evergrande Property Services to the investment firm^2,7.

The terms offer a reference point for buyers weighing other assets from China’s distressed property developers^1,6.

Whether the unit can recover the deposits pledged by its former parent remains an open question for its new owner².

Creditors will look for further recoveries from the group, whose liquidation follows the delisting that marked the end of an era for China’s property sector¹.