Breaking | Shenzhen Metro to become biggest China Vanke shareholder as Evergrande cashes out

China Evergrande Group has agreed to transfer all its shares in China Vanke to Shenzhen Metro Group at a loss, making the state-owned company the largest shareholder of China’s second biggest homebuilder.

The Guangdong real estate giant will cash out of its 14.07 per cent stake in Vanke for about 29.2 billion yuan, and expects to use the proceeds to repay debts, according to a statement to the Hong Kong stock exchange on Friday night.

The asset sale is poised to make Shenzhen Metro Group the biggest shareholder of Vanke with a 29 per cent stake. Beijing introduced the state-owned metro company as a “white knight” earlier this year after stepping in to lambast the biggest shareholder at the time, corporate raider Baoneng.

Evergrande said that the disposal will result in a loss of 7.07 billion yuan because it had splashed out 36.27 billion yuan on Vanke’s shares last year.

“Upon regulatory approval...Shenzhen Metro Group is going to be the largest shareholder of the company,” Vanke’s board said in a filing to the Shenzhen stock exchange on Friday night.

Vanke had been embroiled in a takeover battle since late 2015, when the Chinese insurance conglomerate Baoneng Group accumulated a 25.4 per cent stake in the company in order to mount a hostile takeover and oust Vanke’s existing management.