The injection of assets in Shenzhen Special Economic Zone Real Estate & Properties (Shenzhen Real Estate) is aimed at taking advantage of higher valuations commanded on the mainland due to a large pool of retail investors - making it easier for heavily indebted Evergrande to raise funds.The Shenzhen-listed firm will have most of its property assets as well as a football club, Guangzhou Evergrande Taobao Football Club Co Ltd. At its estimated market value of 228 billion yuan (US$33.7 billion), the company would be worth 3.7 times the current Hong Kong-listed firm.
The future Hong Kong-listed firm will hold 82% of the Shenzhen-listed company and house all its other businesses across the finance, tourism, culture and the internet sectors such as Evergrande Health Industry Group and internet finance firm HengTen Networks Group.
The document said Evergrande is seeking 30 billion yuan in investment from strategic investors who would hold 12% of the Shenzhen-listed firm, while the public would hold 6%.
It aims to complete the restructuring by the end of April.
Representatives for Evergrande were not immediately available for comment. Regulators have yet to comment publicly on the plans for a backdoor listing.
Evergrande's plans follow the delisting of Dalian Wanda Commercial Properties from the Hong Kong stock exchange in September. Wanda plans to relist the company at a later stage on the mainland.
Evergrande has captured investor attention after amassing some US$57 billion in debt, almost six times its market value, due to acquisitions of companies and land.
Shares in Evergrande were up more than 2% on Monday afternoon while the Hang Seng Index was up 0.6%. - Reuters
