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Chinese Developer RiseSun Weighing $1.6 Billion Battery Unit Sale

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(Bloomberg) -- Chinese real estate developer RiseSun Holdings Co. is considering a potential sale of a unit that makes electric-vehicle batteries, according to people familiar with the situation.

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The company is working with an adviser to identify prospective buyers and is seeking as much as 10 billion yuan ($1.6 billion) for RiseSun Mengguli Power Technology Co., the people said, asking not to be identified as the information is private.

RiseSun is also weighing other options, including selling a stake in RiseSun MGL to raise fresh funds, the people said. Negotiations are ongoing and there’s no certainty the talks will result in a transaction, they added.

A representative for RiseSun declined to comment.

RiseSun is one of China’s indebted developers seeking to mop up cash amid tight liquidity and signs of funding stress following a government crackdown on the property sector that triggered defaults by China Evergrande Group and others.

China’s Debt-Saddled Developers Could Face More Sales Setbacks

Property unit RiseSun Real Estate Development Co. had its long-term debt rating cut by Moody’s Investors Service and Fitch Ratings this month to levels several notches below investment grade. The Shenzhen-listed company recently hired advisers to consider debt options. The firm needs to repay $292 million for a bond maturing Jan. 18 and a further $487.7 million for a note due April 24. It has proposed to swap the securities with those not due until 2023 or 2024.

RiseSun MGL, founded in 2002, also develops energy storage and new materials technologies, according to its website.

RiseSun Holdings owns about 74% of RiseSun MGL, according to an exchange filing. The Hebei-based company boosted its stake in the battery maker from 51.8% in a deal that valued RiseSun MGL at 4.5 billion yuan ($706 million), as per a filing in July 2020.

(Updates with Fitch downgrade in sixth paragraph.)

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