October 4, 2016 / 1:42 AM / in a year

Evergrande shares jump on subsidiary's Shenzhen backdoor listing

HONG KONG, Oct 4 (Reuters) - Shares of China Evergrande Group opened 8.8 percent higher on Tuesday after China’s No. 2 developer unveiled plans to spin off some Chinese assets and list them in the Shenzhen stock exchange in search of better valuations.

Evergrande opened at HK$5.7 compared with HK$5.24 on Monday, when trading was halted in the afternoon. The benchmark Hang Seng index was poised to climb 0.3 percent.

The company said on Monday it would spin off its Hengda Real Estate unit to Shenzhen Special Economic Zone Real Estate & Properties in a transaction that would see Evergrande become the controlling shareholder of the Shenzhen-listed company.

The deal in essence would provide a backdoor listing for Hengda, giving Evergrande “an additional fund-raising platform” the company said on Monday. (Reporting by Elzio Barreto and Clare Jim; Editing by Muralikumar Anantharaman)

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