Evergrande Real Estate of China scraps HK IPO

HONG KONG: Chinese property developer Evergrande Real Estate Group Ltd scrapped its plan to raise up to US$2.1bil in a Hong Kong IPO after failing to generate sufficient investor interest, sources said, adding further gloom to the market for capital raising. 

Several sources close to the deal have said in recent days that Evergrande was having a hard time drumming up orders for shares as Chinese property stock prices have tumbled, and the deal’s withdrawal has been widely expected. 

Evergrande adds to the roughly 65 companies globally that have scrapped or delayed IPOs worth about US$23bil since the start of the year, according to Thomson Financial data. 

The company’s decision, made after book-building from institutional investors closed in New York on Wednesday, came despite the roaring trading debut turned in by Visa Inc after it raised nearly US$18bil in the largest ever US initial public offering. 

Shares in the credit-card giant soared as much as 38% in New York on Wednesday in their first day of trading. 

But Evergrande faced an uphill battle after once hot Chinese property stocks have fallen deeply out of favour amid Beijing’s numerous efforts to cool the property market and stave off inflation. – Reuters  

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