Indebted developer China Evergrande gets approval to spin off property management business, raise fresh capital in Hong Kong
Indebted mainland property developer China Evergrande said on Friday it had received approval from the Hong Kong exchange to spin off its property management business, which would allow it to raise fresh capital.
The Shenzhen-based company, China’s biggest property developer, made the proposal on July 31 and will soon apply to list the business in Hong Kong, according to a filing with the exchange late on Friday.
The spin off could help Evergrande raise up to HK$40 billion (US$5.2 billion), according to Raymond Cheng, property analyst at CGS-CIMB Securities, including HK$24 billion from the sale of a 28 per cent stake in the property management business a month ago to 14 investors, and a potential HK$10 billion to HK$15billion from the listing.
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