(Yicai Global) April 4 -- Shares of E-House China Enterprise Holdings soared yesterday after Alibaba Group Holding, the real estate services provider’s second-largest shareholder, backed its debt restructuring plan almost a year after defaulting on a USD300 million bond.

E-House’s stock [HKG: 2048] surged 58 percent to close at 61 Hong Kong cents (8 US cents) yesterday. It gave up some of that gain today, retreating 6.6 percent to 57 Hong Kong cents.

E-House will use most of the equity of its unit TM Home to repay the bond, the Shanghai-based company’s debt restructuring plan showed yesterday. It will also pay USD60 in cash to creditors for every USD1,000 of the debt, it added.

The company defaulted on the bond because of China’s sluggish property market, it said last April. E-House’s net loss shrank 66 percent to CNY3.9 billion (USD567 million) in the 12 months ended Dec. 31 from the year before, its latest earnings report showed. Revenue slumped 43 percent to CNY5 billion.

TM Home, set up by E-House and Alibaba in September 2020, is an e-commerce platform for real estate transactions. Under the debt plan, creditors will own about 54 percent of the joint venture, Alibaba 11 percent, and E-House and its affiliates the rest.

TM Home's business will then cover real estate data and consulting services run by property institute China Real Estate Information Corporation and an online property marketing firm jointly operated with Alibaba's Tmall, E-House said. The JV will also control the US-listed real estate services provider Leju Holdings, it added.

In April 2021, Alibaba sold its majority stake in TM Home to E-House in exchange for about 23 percent of the latter's equity. Hangzhou-based Alibaba owned around 14 percent of E-House as of June 30 last year, ranking second only behind founder Zhou Xin.

Editor: Martin Kadiev