Evergrande liquidators sell controlling stake in property services unit for US$513 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 (US$513.6 million), as they seek to recover assets for creditors owed US$46 billion.

The sale of a 51.016 per cent stake in Evergrande Property Services could give the profitable business a new controlling shareholder after its parent used billions of yuan of its bank deposits as collateral for loans, leaving the company struggling to recover the money.

PAG, a Hong Kong-based investment firm, would acquire about 5.52 billion shares from China Evergrande and CEG Holdings, both in liquidation, according to a joint announcement on Friday.

“Following an extensive and competitive sale process, we are pleased to have been able to conclude this agreement with PAG, the completion of which will enable [Evergrande Property Services] to move onwards into a renewed phase of growth,” liquidator Eddie Middleton said in a statement to the South China Morning Post.

Further work was required before the transaction could be completed, Middleton added.

PAG will pay HK$0.8359 per share for China Evergrande’s 147.16 million shares and HK$0.7271 per share for CEG Holdings’ 5.37 billion shares. The transaction remains subject to conditions, including regulatory approval in mainland China.

Upon completion, PAG will be required to make an unconditional mandatory cash offer for the remaining shares at HK$0.8359 apiece. The offer price is 29.5 per cent below Evergrande Property Services’ closing price of HK$1.185 on October 28, the last trading day before the announcement.

Following a brief suspension ahead of the takeover announcement, the company resumed trading on Friday.

PAG said it intended to maintain Evergrande Property Services’ Hong Kong listing and did not plan any major operational changes beyond board-level adjustments, according to the statement.

The property manager provides services across mainland China and reported revenue of 6.94 billion yuan (US$1 billion) and net profit of 503 million yuan in the first half of 2026.

Its finances, however, have been caught in its parent’s collapse. China Evergrande used 13.4 billion yuan of its bank deposits as collateral for loans. By June, Evergrande Property Services had recovered just 9.5 million yuan from its parent and other parties, according to its interim report.

China Evergrande defaulted on its offshore debt in 2021 and was ordered to wind up by Hong Kong’s High Court in January 2024. Its liquidators had recovered US$435.9 million through asset sales and loan recoveries, less than 1 per cent of the US$46 billion in creditor claims, according to their second progress report published earlier this month.