Evergrande Wins HKEX Approval for Unit’s IPO, a New Route for It to Raise Cash

(Bloomberg) -- Evergrande Property Services Group Ltd. has received the green light from the Hong Kong stock exchange to go public, according to a person familiar with the matter, creating one more avenue for the indebted developer to raise cash.

The property management arm of China Evergrande Group passed a listing hearing in Hong Kong on Thursday, paving the way for an initial public offering, the person said, asking not to be named because the matter is private.

Evergrande is facing pressure to pare back a $120 billion debt pile and increase cash reserves. China’s housing watchdog and central bank have asked some of the country’s biggest developers including Evergrande to report their financing, total debts and business data on the 15th of every month, Bloomberg News has reported.

Evergrande Group owns about 72% 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.

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

Deliberations for the IPO are still ongoing and details of the share sale including size could still change, people familiar have said. A representative for Evergrande couldn’t immediately respond to a request for comment.

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