CHINA Evergrande Group yesterday said it had received approval from the Hong Kong stock exchange to spin off its property projects, paving the way for the developer to proceed with a backdoor listing of those assets in Shenzhen.

    The injection of assets into Shenzhen Real Estate is aimed at taking advantage of much higher valuations commanded on the mainland due to a large pool of retail investors, making it easier for heavily indebted Evergrande to raise funds.

    Evergrande still needs to finalize details with Shenzhen Real Estate and obtain approvals from shareholders, regulators and Shenzhen government bodies.

    Evergrande, which has some US$57 billion in debt but only a market value of US$9.5 billion, hopes the mainland-listed property vehicle will have a market value of US$33.7 billion.

    After the spinoff, the Hong Kong-listed holding company will consist of tourism-related development, finance and internet businesses.

    Evergrande has captured investor attention by spending some US$5 billion building up a 14 percent stake in its biggest rival China Vanke Co. — at the center of corporate power struggle.

    It has since said, however, it no intention of acquiring more shares while State-owned Shenzhen Metro has now become Vanke’s second-largest shareholder — a step seen as paving the way for the subway operator to take control of the property giant. (SD-Agencies)