China Evergrande Group on Nov. 8 decided to terminate its four-year plan to reorganize with Shenzhen Real Estate and subsequently list its Hengda Real Estate Group Co. Ltd. subsidiary in Shenzhen, China.
Of the total 130 billion yuan equity interests, China Evergrande said holders of 86.3 billion yuan worth of Hengda Real Estate shares have agreed to hold their investments, while supplemental deals are being finalized for owners of 35.7 billion yuan equity interests following the completion of negotiations.
The Chinese developer said it will also repurchase equity interest worth 3 billion yuan in Hengda Real Estate. Meanwhile, discussions with owners of 5 billion yuan in equity interest are still in progress.
Prior to the deal's cancellation, China Evergrande reportedly sought government support for the planned backdoor listing, saying that the deal's failure might lead to defaults and an increase in social instability due to potential job losses.
As of Nov. 6, US$1 was equivalent to 6.61 Chinese yuan.