Evergrande hires Goldman again and drops UBS
Evergrande Real Estate Group, the Guangzhou property developer trying to raise up to US$1 billion on the Hong Kong stock exchange, has switched its banking team around for the second time in two weeks.
Separately, Tam Lai-ling, whom the developer hired last month as deputy chief executive, has decided not to join the company.
Evergrande, which is on its second Hong Kong listing attempt, has rehired Goldman Sachs after dropping the Wall Street bank temporarily about a fortnight ago. Swiss bank UBS, which replaced Goldman, is now off the deal.
Mr Tam, the former finance chief of mainland property firm Hopson Development Holdings, was set to join Evergrande as a deputy to chief executive James Xia. He relinquished the senior post because he was unhappy with his pay package, sources close to Evergrande said. Mr Tam could not be reached.
'This kind of [bank and executive] musical chairs is very unusual after a company has applied for an IPO. It looks haphazard,' a source at one of Evergrande's professional advisers said.
Evergrande declined to comment, as did Goldman and UBS.
In its August 7 listing application, the developer named Bank of China International, Merrill Lynch and UBS as its investment banking advisers, excluding Goldman, which had worked on its fund-raising plans for two years.
Just before filing the application, Evergrande also parted company with Credit Suisse, another longstanding banking adviser. Credit Suisse heads a group of lenders that advanced US$430 million to Evergrande in a pre-listing financing deal in 2006.
UBS stepped down from Evergrande's share offering last weekend after Evergrande demanded the Swiss bank should dedicate eight of its most senior Hong Kong and China bankers to the deal, banking sources said.
Evergrande's tiff with Goldman had also concerned staffing levels, sources close to the developer said, although they said this issue was now resolved.
Most investment banks in Hong Kong slashed jobs last year. Since the stock market recovery, these banks have overstretched as clients queue up to do flotations.
Evergrande first tried to raise US$.2.5 billion in Hong Kong in March last year but pulled the fund-raising attempt when mainland house prices crashed and investors blanched at the company's debt levels.
Evergrande racked up heavy debt by going on a land buying spree between 2006 and 2008.
The firm has managed to cut its debt after pulling in healthy sales in the first quarter of this year. Its net borrowings are now 6 billion yuan (HK$6.81 billion), down from 10 billion yuan in early 2008.
Stronger foundation
Evergrande has cut its debt, thanks to healthy sales in the first quarter
From 10 billion yuan in early 2008, the firm's net borrowings are now, in yuan: 6b yuan
