China Evergrande has ended a plan to engineer a back-door listing for its property development unit in Shenzhen, ending a costly four-year pursuit of one of its biggest rivals in the city. The developer, helmed by the country’s third-richest tycoon, Hui Ka-yan, has resolved to terminate the reorganisation plan with Shenzhen Special Economic Zone Real Estate & Properties Group (Shenzhen Real Estate), it said in a Hong Kong stock exchange filing on Sunday. It did not provide any reason for the decision. The reorganisation, first mooted in October 2016, involved selling its unit Hengda Real Estate to Shenzhen Real Estate in exchange for equity control. The deal had been dogged by several delays, controversies and concerns about Evergrande’s indebtedness, after regulators started imposing deleverage “red lines” in late August to prevent potential credit and financial shocks in the economy. It prompted the Shenzhen target to turn cold on the proposal. Hui has called on some 130 billion yuan (US$19.7 billion) of capital in the past four years from more than 30 business partners and companies to invest in Hengda by promising big dividends. The money was to be repaid by the end of March next year, should the reorganisation fail to proceed. Some of his investors have agreed to maintain their investment in Hengda and not to demand for repayment of as much as 86.3 billion yuan, according to the Sunday’s filing, while negotiations with investors holding 35.7 billion yuan worth of interests have been completed, it said. Talks with others holding 5 billion yuan were in progress, and the company had agreed to buy back 3 billion yuan of equity in Hengda from undisclosed investors. China Evergrande rues speculative attack amid cash woes ahead of January 31 deadline The reorganisation timeline for the deal was pushed out six times, showing the difficulty in coming to terms. The most recent extension was in December 2019, by a full year to the end of this year. Even so, Shenzhen Real Estate in late September called for care and patience in assessing the deal , saying it was complicated and unprecedented. Since 2016, the regulatory environment for Chinese property developers has changed drastically as Beijing has started to rein in runaway property prices. Most recently, regulators have issued the so-called red lines of deleveraging targets for developers. Evergrande had 835.5 billion yuan in borrowings on June 30, up from about 800 billion yuan at the end of 2019, according to its interim report published in late September. Almost half of them will come due through June next year. The group has an expansive reach in the onshore property market, owning more than 870 projects in at least 280 cities across all provinces and regions, according to its website. The economic slowdown, however, forced it put 223 properties in 111 cities up for sale with big discounts to shore up its cash flow. The Guangzhou-based developer earlier this month agreed to sell its stake in Xinjiang Guanghui Industry Investment Group, an energy-to-property conglomerate based in north-western China, for 14.9 billion yuan to Shanghai’s electricity generator Shenergy. Evergrande bought the stake in 2018 for 14.5 billion yuan.