(Bloomberg) -- Two companies backed by local governments in Guangdong province have stepped in to provide a lifeline for beleaguered developer China Evergrande Group after a key strategic investor demanded an exit, according to a person familiar with the matter.

Firms owned by the city governments of Shenzhen and Guangzhou will buy equity worth 30 billion yuan ($4.6 billion) from existing investors in Hengda Real Estate, a unit that holds Evergrande’s main property assets in China, the person said, asking not to be identified as the information isn’t public. The buyers are Shenzhen Talents Housing Group Co. and Guangzhou City Investment Company Ltd., while the sellers include a consortium led by Shandong Hi-Speed Group Co., Hengda’s largest strategic investor, the person said.

Shenzhen-based Evergrande has come under intense scrutiny after fears of a cash crunch triggered a sell-off in the company’s bonds and shares in late September. The world’s most-indebted developer has since raised cash through asset sales and is seeking to list its property management services unit in Hong Kong, easing concern about its ability to service near-term debt. Still, doubts have lingered about the company’s long-term financial strength.

A particular sticking point has been its ability to reach deals with strategic investors who had the right to demand repayment of as much as 130 billion yuan if Evergrande didn’t win approval for a backdoor listing in China by Jan. 31. Evergrande scrapped those plans earlier this month after a majority of its strategic investors agreed not to ask for repayment.

Investors with equity interests of 125.7 billion yuan, including the two new state-owned firms, have entered into supplemental agreements to hold their stake as ordinary shares, the developer said in a statement on Sunday.

Its statement didn’t mention the Shandong Hi-Speed consortium, which had previously balked at a deal concerned over possible losses and held stake worth about 23 billion yuan.

For investors holding 4.3 billion yuan of equity, where agreements haven’t been stuck, Evergrande has repaid the principal in cash and repurchased shares, according to Sunday’s statement.

Shandong Hi-Speed agreed to sell its equity worth 20 billion yuan to Shenzhen Talents, the person familiar said. The remaining 3 billion yuan of its holding is being bought back by Evergrande, a separate person said, also asking not to be identified. Strategic investors sold a further 10 billion yuan worth of equity to Guangzhou City Investment, one of the people said, without providing details about the investors.

Evergrande didn’t immediately reply to questions seeking further comment during non-business hours. Calls to the headquarters of Shandong Hi-Speed, Shenzhen Talents Housing and Guangzhou City Construction went unanswered on Sunday.

Shandong Hi-Speed’s insistence on getting its money back has stood in stark contrast to other Evergrande investors. That may in part be because Shandong Hi-Speed isn’t part of the developer’s supply chain, like most other investors, who rely on Evergrande for revenue.

©2020 Bloomberg L.P.