CHINA Evergrande Group is considering an initial public offering (IPO) in Hong Kong for its bottled water business, people with knowledge of the matter said, as the Hong Kong-listed real estate developer seeks new sources of funding.

China Evergrande is holding exploratory discussions with investment banks on a separate listing for Evergrande Spring, said the people.

A potential IPO could raise several hundred million dollars and take place next year, the people said.

China Evergrande has been selling equity in non-property assets and accelerating property sales to reduce leverage, yet it is struggling to restore confidence among investors.

China Evergrande Group owns a 49 percent stake in Evergrande Spring, according to its 2020 annual report.

Deliberations are at an early stage and Evergrande could decide to keep the business, the people said. A representative for Evergrande didn’t immediately respond to queries by email and phone.

Evergrande Spring offers over 50 products in the mineral water, grocery, dairy and fresh food segments, according to the parent company’s website.

Its products are available in more than 30 provinces and cities across China, as well as more than 10 countries and regions participating in the country’s Belt and Road Initiative.

Evergrande Spring has established partnerships with more than 1,000 distributors and more than 500,000 sale outlets across China, according to the annual report. (SD-Agencies)