(Yicai) Sept. 19 -- Nantong Sanjian Holdings’ frozen stake in a listed copper processor has been put up for judicial auction, after the general contractor was dragged into a debt crisis as a result of massive arrears owed by bankrupt property developer China Evergrande Group.

Sanjian’s 30 percent of Jingyi Metal will be auctioned on Oct. 9, with the starting bid set at CNY725 million (USD101.9 million). The majority stake was pledged and judicially frozen as a consequence of Sanjian’s debt crisis.

Jingyi Metal’s products are used in the home appliance, vehicle, communications, and new energy sectors. It had a net profit of CNY27.7 million (USD3.9 million) and operating revenue of CNY3.8 billion (USD527.7 million) last year, up 16 percent and 38 percent, respectively.

Boosted by rising demand for its products from the new energy industry, Jingyi Metal’s shares [SHE: 002295] have soared 69 percent since the end of last year, hitting a record high in mid-July. They closed 1.8 percent higher at CNY10.86 (USD1.53) each in Shenzhen today.

Sanjian was once the general contractor for numerous Evergrande real estate projects across China. During their cooperation, Evergrande used commercial acceptance bills as the main payment method.

On the eve of Evergrande’s own debt crisis in 2021, the overdue commercial bills and undue project funds, including advanced funds, that Evergrande owed to Sanjian exceeded CNY36 billion (USD5.1 billion). The arrears led directly to a break in Sanjian’s capital chain.

As of March 31, the firm had CNY7.4 billion in overdue interest-bearing debt. The company has been involved in more than 5,500 lawsuits related to its overdue debts, and was listed as a dishonest debtor over 430 times, facing enforcement actions totaling over CNY1.6 billion. This has resulted in its assets being forced into auction.

At its peak business period in 2018, Sanjian ranked 157th on the China Top 500 Enterprises list and 39th on the China Top 500 Private Enterprises list. It had revenue exceeding CNY100 billion (USD14.1 billion) that year, ranking second among private firms in Nantong, according to data from the local bureau of industry and information technology.

Editors: Tang Shihua, Futura Costaglione