Evergrande raises $5.8 bln ahead of backdoor listing of property unit

HONG KONG, June 1 (Reuters) - China Evergrande Group , the country’s biggest home builder, said it is set to gain 39.5 billion yuan ($5.8 billion) from a second round of fundraising for most of its property assets which are slated for a backdoor listing in Shenzhen.

The developer plans to inject almost all of its property assets, held by Hengda Real Estate Group, into Shenzhen Real Estate.

Evergrande said the latest round meant it had now raised 70 billion yuan from investors who will hold about 26 percent of Hengda.

Investors who took part in the latest round include Shum Yip Group Ltd and Shenzhen Baoxin Investment Co Ltd.

Evergrande is seeking a backdoor listing valued at 198 billion yuan ($29 billion) in Shenzhen, aiming to take advantage of higher valuations commanded on the mainland due to a large pool of retail investors. The plan will make it easier for heavily indebted Evergrande to raise funds.

Evergrande’s stock was up 6 percent in morning trade, extending a bull run this year, driven in part by around $800 million worth of stock buybacks.

That bull run included a 20 percent jump on Monday after Morgan Stanley initiated coverage with an overweight rating. It argued that the introduction of strategic investors will help Evergrande lower its debt levels.

$1 = 6.8098 Chinese yuan Reporting by Clare Jim and Donny Kwok; Editing by Edwina Gibbs