PAG to buy Evergrande services stake in boost to creditor recovery

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PAG buys Evergrande stake

Highlights

PAG has agreed to acquire a 51% stake in Evergrande Property Services at a 30% discount to its last closing price, paying Rmb500 million ($75 million) in liquidator fees.
Liquidators have recovered only $436 million out of $46 billion sought by creditors, with the Property Services stake sale representing a significant new source of funds.
Evergrande Property Services shares dropped 15% on Friday, leaving a market value of HK$10.9 billion after the failed HK$20 billion sale to Hopson in 2021.

Sale terms and recovery process

As reported by Financial Times, Hong Kong-based private equity firm PAG has agreed to acquire a 51 per cent stake in Evergrande Property Services from the parent company's liquidators, according to a stock exchange filing published on Friday.

The offer is priced at about a 30 per cent discount to the stock's closing level in Hong Kong on Wednesday, its last trading day before the announcement. PAG is also set to pay Rmb500 million, or about $75 million, in fees to the liquidators.

Eddie Middleton, one of the liquidators from Alvarez & Marsal, said the agreement followed an extensive and competitive sale process. He added that significant work is still required by all parties before the transaction can be completed.

The liquidators launched the sales process in August 2025 with UBS and Citic as advisers. A preferred bidder was chosen in March but did not proceed, and the process was reopened in July before an agreement with PAG was reached in September.

Implications for creditors and China's property sector

Evergrande's Hong Kong entity was ordered to be wound up in 2024, prompting liquidators to pursue assets for international creditors after the developer's collapse under more than $300 billion in liabilities in 2021. The company had been one of China's largest property developers before its failure marked a sharp reversal in the country's long-running property boom.

Last week, the liquidators said the chances of recovering assets from mainland China subsidiaries were considered remote. They had recovered only $436 million out of the $46 billion sought by creditors, excluding the latest share sale, making the disposal of the Evergrande Property Services stake a significant potential source of funds.

The liquidators are also pursuing legal action against PwC entities in mainland China and Hong Kong, as well as the firm's global body, seeking $8.5 billion over alleged audit negligence. Separately, they are awaiting the outcome of a judicial review that could overturn a HK$1 billion, or $127 million, agreement between PwC Hong Kong and the city's securities regulator.

The liquidators argue that compensation for Evergrande's independent minority shareholders under that agreement bypasses creditor priority. Before the winding-up, Evergrande had tried to sell the same stake to Chinese developer Hopson for HK$20 billion, or $2.5 billion, but that deal collapsed in 2021.

Shares in Evergrande Property Services fell 15 per cent on Friday, leaving the company with a market value of HK$10.9 billion.

Our earlier coverage on China’s third-quarter growth outlook looked at how fresh policy support—such as targeted rate cuts, mortgage subsidies, and the use of unused local-government debt quotas—was expected to deliver only a modest pickup in GDP growth. We also noted that despite stronger exports and factory output, weak domestic demand and a prolonged property slump continued to weigh on confidence and the broader recovery.

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