Evergrande Real Estate Group, the Guangzhou-based developer that scrapped a March initial public offering to raise up to HK$16.58 billion, has secured new funding from two of its pre-listing investors while a third - Temasek Holdings of Singapore - refused to chip in more capital, market sources said.
But negotiations between Evergrande and Temasek, which manages the Singapore government's direct investments, were ongoing, a source said.
In 2006, while preparing for a listing, Evergrande brought in three financial investors Deutsche Bank, Merrill Lynch and Temasek.
They gave the developer combined funding of US$400 million by accepting convertible bonds.
Under the original listing plan, the three investors could convert the bonds into a combined stake of as much as 12.6 per cent before the completion of the global offering, using the lowest valuation for pricing. At the highest valuation, the three could get a combined stake of about 10 per cent in Evergrande.
Sources said Deutsche Bank and Merrill had agreed and committed to boost their stake in the mainland developer to about 15 per cent in a second round of capital injections. 'That's the agreement we have,' a source said. 'However, discussions are still continuing with Temasek.' The new investment will work out to about a 15 per cent interest, although that is not a final number.