Evergrande Group: Hong Kong listing of spin-off property companies has submitted a listing form

SMM: September 29, China Evergrande Group announced that the company intends to disperse Evergrande property listed on the main board of the Stock Exchange, has submitted a listing application form to the Stock Exchange.

According to the opinion Real Estate New Media, the company proposes to spin off the shares of Evergrande Properties, a subsidiary, to be listed independently on the main board of the Stock Exchange. The independent listing of Evergrande property shares on the main board of the Stock Exchange constitutes a spin-off of the Company in accordance with Application guidelines 15, and the Stock Exchange has confirmed that the Company can carry out the proposed spin-off.

On 29 September 2020, Evergrande Properties submitted a listing application form to the Stock Exchange for listing and trading of Evergrande property shares on the main board of the Stock Exchange.

Evergrande plans to sell shares globally after approval for the listing. Details of the global offering have yet to be further finalized. As at the date of this announcement, Evergrande property is indirectly held by Evergrande Group with an interest of 71.94%. Upon completion of the listing, Evergrande property will remain a subsidiary of the company.

Evergrande said that the spin-off group mainly provides property management services and related value-added services in China. The spin-off Group is one of the largest and fastest growing operators of integrated property management services in China. The business of the spin-off group has grown to a scale sufficient for independent listing and the directors are of the view that the proposed spin-off is in the interests of the Group for the following reasons:

First, the proposed spin-off will give the company and its shareholders the opportunity to realize the investment value of the spin-off business on the independent platform of the spin-off group.

Second, the proposed spin-off will enable the spin-off group to establish its status as an independent listed group, have an independent financing platform and expand its investor base through global offerings. The proposed spin-off will enable the spin-off group to have direct access to the capital market for equity and debt financing to finance existing business and future expansion without relying on the company, thereby improving its operational and financial management efficiency;

Third, the proposed spin-off will enable the spin-off group to enhance its corporate image, so as to enhance its ability to attract strategic investors to invest directly in the spin-off group and establish a strategic partnership with it, which can provide synergy for the spin-off group.

Fourth, the proposed spin-off will enable the Group and the spin-off Group to have a more focused development, strategic planning and better allocation of resources in their respective businesses. Both the group and the spin-off group will benefit from an efficient decision-making process under an independent management structure.

Fifth, the independent listing of Evergrande property will enhance its reputation, so as to improve its operating performance and better realize its value. Such added value will provide an opportunity for the Company and its shareholders to increase the value of their investment in the spin-off group on the independent spin-off platform; and

Sixth, the proposed spin-off will optimize the operational and financial transparency of Evergrande property, which will enable investors to better evaluate their operating performance and financial position independently, thus enhancing the overall value.