China Evergrande agreed to sell control of property services arm to PAG for HKD4 billion

China Evergrande and a subsidiary will sell all their shares in Evergrande Property at different prices, the Guangzhou-based property manager said. The weighted average price is about HKD0.73 per share. The liquidators signed the share purchase agreement on behalf of the sellers.

Mandatory offer and listing

Once conditions are met and the stake transfer is completed, PAG will become Evergrande Property's new controlling shareholder and launch a mandatory general offer for the remaining shares at HKD0.84 each, nearly 30 percent below the closing price before trading was suspended for one day. PAG intends to maintain the listing status and has no plans to take the company private or delist it. Whether Evergrande Property can remain listed will depend on the proportion of shares held by public investors after the offer closes, the announcement said.

Evergrande Property's shares closed 17.7 percent lower at HKD0.98 when trading resumed, giving the company a market capitalization of about HKD10.5 billion (USD1.3 billion).

Why the sale matters

The sale is a major step in the liquidation of China Evergrande. It advances a process that began in September 2025, when liquidators sought buyers for one of Evergrande's key remaining assets. A Hong Kong court ordered the developer's liquidation in January 2024. Evergrande defaulted on most of its roughly USD300 billion in liabilities.

In their second progress report, the liquidators Edward Middleton and Tiffany Wong of Alvarez & Marsal said they had recovered USD435.9 million from asset sales and loan recoveries, about 1 percent of the roughly USD46 billion in claims filed against the developer. Creditors have received nothing so far. The liquidators aim to make a first interim dividend payment in the first half of 2027, with the amount undetermined. They described prospects for recovering value from mainland subsidiaries as remote.

A profitable unit

Evergrande Property stayed profitable through its parent's collapse. Revenue rose almost 5 percent to CNY6.9 billion (USD1 billion) in the first half, while profit attributable to shareholders climbed about 10 percent to CNY517 million (USD77.6 million). At the end of June it held about CNY4.2 billion (USD637 million) in available funds and virtually no interest-bearing debt.

PAG's expansion

PAG is an Asia-Pacific-focused alternative investment firm with more than USD60 billion in assets under management at the end of June. Yicai reported that industry observers see the acquisition as a key step in expanding its real estate business from commercial properties into residential property management.

Evergrande Property was first put up for sale in 2021, when China Evergrande sought cash during a liquidity crisis. The property manager generated recurring revenue from managing residential communities and was among the group's key assets earmarked for sale.