CST Group announced on October 5 at the Hong Kong Stock Exchange that it has sold a total of 32.18 million shares in Evergrande Auto, with about HK$125 million ($16.05 million) through the open market at an average price of about HK$3.89 per share.
The main businesses of CST Group are mineral resources exploration, financial investment, property investment and money lending. The announcement noted that as the disposal was conducted in the open market through the company’s securities brokers, the identity of the purchaser was uncertain.
According to CST Group, the directors are concerned about the recent negative news surrounding the heavily indebted Evergrande Group and the sharp decline of Evergrande Auto’s share price throughout the past few months. They believe that this disposal of shares can reduce losses for CST Group.
Evergrande Group requested a halt to the trading of its shares in Hong Kong on Monday. Evergrande Property Services Group, a spin-off listed last year, also requested a halt and said it referred to “a possible general offer for shares of the company.”
In September of last year, Evergrande Auto announced its intention to list on the Science and Technology Innovation Board at the Shanghai Stock Exchange. However, on September 24, Evergrande Auto announced that as disclosed in its interim report, constrained by poor liquidity, there has been a delay in paying suppliers and projects in the group’s Evergrande Elderly Care Valley and new energy vehicles, and some projects are currently suspended.