New | Evergrande sells Hengda stake, valuing unit at 300 billion yuan

China Evergrande Group, the country’s largest property developer by sales, has raised 39.5 billion yuan (US$5.78 billion) in a second round of funding this year, after selling a stake in one of its core subsidiaries to a group of 13 investors, ahead of the relocation of its listing status to the Shenzhen Stock Exchange.

Combined with the first stake sale in January, Evergrande has raised a total of 70 billion yuan through selling 26.12 per cent of its Hengda Real Estate subsidiary, according to a stock exchange filing.

Evergrande was planning to list its property assets on the Shenzhen exchange, the developer said in October, where stocks were trading at 26 times earnings, higher than the 8 times on the Hang Seng China Enterprises Index. Evergrande planned to inject its Hengda assets into Shenzhen Real Estate in return for shares, which will make Evergrande’s Kailong Real Estate unit the controlling shareholder of Shenzhen Real Estate.

The plan would reduce Hengda’s debt, Evergrande said.

“The proposed reorganisation will enable the company to effectively list the [company’s] real estate related assets on the Shenzhen Stock Exchange A-share market,” according to its statement.