The Chinese real estate debt bomb wants to raise $ 2 billion before the IPO


China Evergrande Group Group today announced on March 29 that it will sell 10% of its shares on the Fangchebao electronic trading floor for $ 2.1 billion before the initial public offering.

Before the time of capital mobilization, “electronic market” to buy and sell real estate and cars Fangchebao is valued at over 150 billion yuan (equivalent to 22.92 billion USD). The Evergrande subsidiary is planning to list on the Nasdaq stock exchange of the US or another appropriate stock exchange, an Evergrande representative said in the prospectus.

Evergrande is the most indebted real estate business in China. The group said it would partially divest some of its subsidiaries to reduce the debt burden in the context China tightens Real estate regulations and investors were concerned about the business’s cash flow.

Previously, the group completed the listing of Evergrande real estate service company in December 2020 with the mobilized capital of up to $ 1.8 billion. In January, China Evergrande New Energy Vehicle, the EV subsidiary of Evergrande Group, said it planned to raise $ 3.4 billion from six new investors.

Evergrande share price rebounded 8.5% to HK $ 16.08 in trading this morning, after the news Evergrande wanted capital sale at the e-commerce floor Fangchebao.

According to Evergrande, capital raised from Fangchebao will be deployed through the form of selling outstanding shares and release New shares and about half of the proceeds from the deal will be used for the general purpose of the corporation.

Among 17 investors planning to buy shares in Fangchebao, there are “big hands” investors such as CITIC Capital – the company is managing a portfolio of assets up to 35 billion USD in China market. Real Estate Corporation Hong Kong New World Development (Mr. Cheng Kar Shun – BTV), and CEO of Evergrande Group, Mr. Xia Haijun.

“The corporation’s financial strength will be significantly improved, thereby boosting Fangchebao growing rapidly, “said an Evergrande representative.

Tomorrow 30/3, Evergrande plans to announce profits in 2020 – the year Evergrande becomes the focus of scrutiny of Chinese and regional investors after an information leak that this corporation sends letters to Quang province officials. East (China) to “lament” about the risk of running out of money.

Also in the above leaked letter, Evergrande warning systematic risks from the 835.5 billion yuan debt that this group is currently carrying, especially the risk of chain bankruptcy of the group’s partners. Although Evergande has confirmed that the information is embroidery, investors can not help worry when China has tightened regulations on the real estate market, causing domestic real estate developers to meet more. challenge.

According to Bloomberg, Evergrande is the world’s most indebted real estate business with more than $ 120 billion. Particularly interest-bearing debt of Evergrande was up to 110 billion USD, by the end of 2020, Reuters reported. After information about your financial health Evergrande publicly announced by 2020, at least 5 banks and two trust companies met urgently to discuss the status of Evergrande. In which, 2 banks have banned Evergrande from withdrawing more money from unused credit line.