Two companies backed by local governments in Guangdong province have stepped in to provide a lifeline for beleaguered developer China Evergrande Group after a key strategic investor demanded an exit, according to a person familiar with the matter.
Firms owned by the city governments of Shenzhen and Guangzhou will buy equity worth 30 billion yuan ($4.6 billion) from existing investors in Hengda Real Estate, a unit that holds Evergrande’s main property assets in China, the person said, asking not to be identified as the information isn’t public. The buyers are Shenzhen Talents Housing Group Co. and Guangzhou City Investment Company Ltd., while the sellers include a consortium led by Shandong Hi-Speed Group Co., Hengda’s largest strategic investor, the person said.
