CHINA Evergrande Group said yesterday that its property management arm, Evergrande Property Services Group Ltd., is seeking to raise as much as HK$15.8 billion (US$2.04 billion) in a Hong Kong initial public offering (IPO).

The sale of 1.62 billion shares comprises 50 percent new stock and 50 percent sale shares and the price range has been set at HK$8.50 to HK$9.75 apiece.

The Shenzhen-based developer secured 23 cornerstone investors who agreed to subscribe for HK$7.2 billion of stock in the IPO.

The cash raised would help Evergrande pare back a US$120 billion debt pile under a more stringent oversight of developers’ fundraising activities by regulators. China’s housing watchdog and central bank have asked some of the biggest developers including Evergrande to report their financing, debt and business data on the 15th of every month, Bloomberg News reported.

Evergrande owns about 72 percent of the property services arm, according to the preliminary prospectus. The subsidiary plans to use the money raised for acquisitions and investment, to upgrade its technology and to recruit talent.

The IPO is part of a trend of China’s developers spinning off management units in Hong Kong at a record pace. About US$4.59 billion has been raised through property management IPOs this year, overtaking 2019’s record US$3.26 billion.

Huatai International Ltd., UBS Group AG, ABC International, CCB International, Citic Securities Co. and Haitong International are joint sponsors of the offering.

In August, Evergrande raised US$3 billion by selling a stake in its property management arm to investors including Tencent Holdings Ltd. Companies linked to Citic Capital Holdings, the wife of billionaire mogul Joseph Lau and the family investment arm of New World Development Co. billionaire Henry Cheng, are also among the pre-IPO investors.

(SD-Agencies)