Evergrande to sell $1.5 bil. bank stake

Struggling Chinese real-estate giant Evergrande Group will sell a 1.5-billion-dollar stake in a regional bank to a state-owned company in a move that could help lighten its debt burden.

Evergrande says it is selling 19.93 percent of the outstanding shares of Shengjing Bank to a government-backed investment firm.

The real estate developer currently holds a 34.5 percent stake in the bank. It says the involvement of a state-owned company would help stabilize the bank's operations.

It is speculated that Chinese authorities encouraged the sale to try and limit the damage from Evergrande's problems.

The company faces another interest payment of 47.5 million dollars due on Wednesday for dollar-denominated corporate bonds.

Evergrande's troubles have put China's real-estate industry under increased scrutiny. Market watchers have been reevaluating the financial health of other major developers and the Chinese economy as a whole.