Evergrande Real Estate, the mainland's biggest property developer by area sold last year, is seeking to raise as much as US$580 million through a share placement after its strong performance in recent months.
The Guangzhou-based firm, controlled by mainland billionaire Hui Ka-yan, plans to sell up to one billion new shares at HK$4.35 to HK$4.50 each, according to a term sheet obtained by the South China Morning Post. Hui controls 68 per cent of the firm.
The pricing represents a discount of 3.23 per cent to 6.45 per cent to Evergrande's closing price of HK$4.65 yesterday. Buyers of the shares are subject to a three-month lock-up period.
The proceeds will be used to repay debt and for general corporate purposes, the term sheet shows.
The placement comes after shares in the developer have soared 57 per cent since September, hitting their highest level in more than six months this month, due to the rising appetite of investors encouraged by the easing measures of central banks around the world.
If demand is good, the size could be boosted to 1.2 billion shares to raise up to US$697 million, the term sheet says.
Bank of America Merrill Lynch, BOC International and Deutsche Bank are joint bookrunners for the deal.
The developer sold 360 million shares at HK$3.77 each in November 2010.
Evergrande is the latest major property firm to join the recent rush to raise funds in Hong Kong. At least three others - Yue Xiu, Fantasia and Guangzhou R&F Properties - are selling bonds in the city.
The property sector was the best performer on the Hang Seng Index last year.