Liquidators overseeing the dismantling of China Evergrande Group, once Asia’s most indebted property developer, have enlisted UBS Group AG and Citic Securities Co. to spearhead the renewed effort to sell its property management subsidiary, according to a source who wished to remain anonymous.
The strategic move comes after prior sales attempts failed and as court-appointed liquidators scramble to extract value from the besieged conglomerate, according to the source.
UBS and Citic are working to identify potential buyers for Evergrande Property Services Group Ltd., which liquidators now regard as critical for boosting creditor recoveries. At Tuesday’s briefing, the liquidators labeled the property management arm their top priority, noting its HKD 9 billion market capitalization and CNY 12.8 billion in 2023 revenues represent significant potential value amid an otherwise fraught estate.
Yet significant obstacles remain. Evergrande Property Services’ stock has tumbled roughly 96% from its peak in 2021, continuing to languish at penny stock levels.
The parent company’s collapse has severely impacted the subsidiary, eroding market confidence, stunting expansion, and disrupting project operations. Despite delivering a net income of RMB1 billion last year across 3,000 projects, the company’s image and business prospects remain deeply entwined with the fate of its embattled parent.
The urgency to sell gains additional impetus as China Evergrande Group prepares for its August 25 delisting from the Hong Kong Stock Exchange, following 18 months of suspended trading prompted by a Hong Kong court-issued winding-up order. Facing a daunting 187 claims totaling around $45 billion, liquidators have ruled out any comprehensive restructuring of the group.
So far, efforts to monetize Evergrande’s vast portfolio have yielded only modest results. Liquidators Edward Middleton and Tiffany Wong reported asset realizations of just $255 million to date—roughly $167 million of which have been linked directly to the parent company. They cautioned that the complexity of Evergrande’s corporate structures means creditors cannot assume these funds will become fully available.
The duo now preside over more than 100 related entities with a combined estimated value of HKD 27 billion.
