Evergrande to Raise 30 Billion Yuan for Shenzhen Backdoor Listing
(Beijing) — Leading real estate developer China Evergrande Group said it will raise 30 billion yuan ($4.3 billion) from eight investors as part of its plans for a “backdoor listing” in Shenzhen to help it better access the Chinese mainland’s domestic capital markets.
The plan is part of a broader move by offshore-listed Chinese companies to list on domestic markets in Shanghai and Shenzhen, where they can often get higher valuations from local investors who are more familiar with their names. The move will allow Evergrande to continue raising funds from international investors through its current Hong Kong listing, while also giving it access to mainland investors through a new listing in Shenzhen.
But many similar plans have run into headwinds recently, as China’s securities regulator clamps down on a process that is far less transparent than traditional initial public offerings (IPOs).
Under its plan, Evergrande will raise the 30 billion yuan by selling 13.2% of its Hengda Real Estate unit to the group of eight investors, which include a subsidiary of the Citic financial services conglomerate, according to a statement filed in Hong Kong on Monday. In exchange for their investments, each of the eight will receive stakes of 1.3% to 2.2% of Hengda.
Hengda will then be purchased by Shenzhen Real Estate, a Shenzhen-listed shell company being used as the backdoor listing vehicle. Evergrande would then become Shenzhen Real Estate’s controlling shareholder, completing the backdoor listing, while the eight new investors would own small stakes in the company through their Hengda holdings.
“The company does not rule out the introduction of further investors to Hengda Real Estate in the near future,” Evergrande said in a statement. “The company will disclose any such further investments in compliance with the listing rules when binding investment agreements have been entered into.”
The deal will reduce Evergrande’s own financial exposure in the backdoor listing process, Citic Securities, the brokerage arm of Citic, wrote in a research note that was generally positive of the development.
“The implications of this introduction of strategic investors are clear for Evergrande. On one hand, it will help the company to reduce its relatively heavy debt load,” Citic Securities wrote. “On the other hand, this will further help to prepare” for the backdoor listing.
Contact reporter Yang Ge (email@example.com)
Oct 26 06:48 PM
Oct 26 06:37 PM
Oct 26 06:05 PM
Oct 26 06:00 PM
Oct 26 05:05 PM
Oct 26 03:12 PM
Oct 26 01:11 PM
Oct 26 11:51 AM
Oct 26 10:49 AM
Oct 24 03:05 AM
Oct 23 06:43 PM
Oct 23 05:51 PM
Oct 23 05:40 PM
Oct 23 05:19 PM
Oct 23 12:53 PM
- 1In Depth: Who’s Getting Vaccinated? High-Risk Groups, Students Going Abroad Join China's Growing Trials
- 2China Encourages More Domestic Investment Abroad
- 3Semiconductor Tech Trends Favor China in the Long Term
- 4Gallery: Parents Mob Tutoring Firm They Think Is About to Go Bankrupt
- 5Analysis: Intel’s Memory Sale Leaves China’s Chip Aspirations Out in the Cold
- 1Power To The People: Pintec Serves A Booming Consumer Class
- 2Largest hotel group in Europe accepts UnionPay
- 3UnionPay mobile QuickPass debuts in Hong Kong
- 4UnionPay International launches premium catering privilege U Dining Collection
- 5UnionPay International’s U Plan has covered over 1600 stores overseas