According to the South China Post Southern China-based Evergrande Real Estate Group, which recently canceled plans for a Hong Kong IPO, is looking to at least three strategic partners for stake sales in a bid to raise capital.

Evergrande (the illustration is from its site) is talking with Deutsche Bank, Merrill Lynch and Singapore’s Temasek Holdings, which together own a combined $400 million of the property developer’s convertible bonds.

The report added: ‘The partners have agreed to take up a larger stake but some details are still pending discussion. Evergrande will have new money for development while the three investors can get a larger piece of the firm and lower their average acquisition cost.’

It does not sound quite as encouraging as it might be.
Source: Forbes

The China Securities Regulatory Commission has stressed again that a real estate developer cannot use the fund-raising from its initial public offering to buy lands for real estate development as well as hoard land reserves and properties.

An executive at a property company that is seeking regulatory approval for an IPO said that if a real estate developer mentions such purpose in the IPO application, it will be refused.

Industry analysts said the result of this is listed real estate developers now need to pay more attention before they rush to buy land, which used to be a major driver to their share prices.

Zhang Yuliang, chairman of Greenland Construction said the reminder from the commission is substantially an encouragement to quality real estate developers that are expecting to list in the domestic A-share stock market. He said the restriction would not affect Greenland, the largest real estate developer in Shanghai.

However, an analyst at a consulting services provider in Shanghai, said the issuing of the reminder will impact the market sentiment to a certain extent. Some real estate developers will have to slow the IPO applications and rewrite their applications to meet the requirement.

And perhaps the issuance of the reminder signals a substantial change in CSRC’s attitude toward supervision on the domestic real estate industry and a change in appraisal standard for listed real estate developers, which used to be closely linked to their land reserves.

An UBS analyst earlier said the situation that investors last year chased by listed real estate developers with affluent land reserves will change in 2008. And the prediction was made that real estate developers in second- and third-tier cities would continue to seize land reserves.
Source: Trading Markets

Guangzhou-based property developer Evergrande Real Estate Group Ltd (3333.HK) has scrapped its initial public offering (IPO) in Hong Kong due to the slumping market, according to an unidentified market source.

Evergrande had offered 2.96 billion shares at HK$3.5-5.6 each in the IPO, raising HK$10.36-16.58 million for the purpose of expanding its business.

The listing was originally planned for March 28.

The company had already extended its retail subscription period by one day earlier this week to give investors more time to consider the offer.
Source: Forbes

Evergrande Real Estate Group, Donald Trump’s potential partner in a Shanghai office project, and its owners said that it plans to raise $2.1 billion in the world’s largest IPO by a real estate company since June.

Evergrande plans to sell 2.85 billion new shares for $0.45 to $0.7 each. Existing owners will be offered 110.9 million more shares at the same price.

The Guangzhou-based company may become the first Chinese developer to complete a Hong Kong initial public offering this year, amid the slowest start to the city’s IPO market in eight years measured by the number of sales.

Evergrande focuses on smaller projects, which enables it to shorten development periods to three to five years, compared to five years for other homebuilders. It anticipates a sevenfold increase in earnings this year on strong property revenue

A wide price range for the proposed $2.1 billion IPO suggests the issuer wants as much flexibility as possible should the markets turn during the roadshow.

Evergrande, which focuses primarily on second tier cities, is expected to deliver strong earnings growth over the next few years after an aggressive accumulation of land in the past 18 months, but based on the pricing terms it appears the company realises that this may not be enough in the current market environment.

Acknowledging the fact that Chinese property stocks aren’t exactly the most favoured sector at the moment one source said during the pre-marketing, ‘It will have to come cheap.’

Evergrande’s IPO will stay open until March 18 and the final price is expected to be determined by the 20th. The trading debut is scheduled for March 28.
Source: MenaFN and Finance Asia.com

Xinyuan Real Estate, a foreign-funded real estate firm based in Henan Province, central China, is now listed on the New York Stock Exchange, becoming the first Chinese real estate firm to be offered on an American exchange.

According to its prospectus Xinyuan raised US$299.5 million from its initial offering.

An analyst said the biggest attraction of Xinyuan for foreign investors is that they are optimistic on the emerging estate markets in China.

The real estate business of Xinyuan is mainly in medium-sized Chinese cities. The company has nine wholly owned subsidiaries and two related companies. It has developed a total area of 939,000 square meters over the past decade and more than one million square meters are still under construction.

It maintains a compound annual growth of 86% in sales contracts.

Xinyuan was jointly started by Equity International and Blue Ridge China in cooperation with Henan Xinyuan Real Estate in August 2006.

So far, there are 38 Chinese companies listing on NYSE.
Source: Trading Markets