• Chinese developer acquired 5.59 percent stake on Feb. 29
  • Evergrande paid HK$12.5 billion for Hong Kong tower last year

A subsidiary of Evergrande Real Estate Group Ltd. has paid HK$3.89 billion ($500 million) for a 5.59 percent stake in Shengjing Bank Co., in the latest purchase by the Chinese developer that is piling on debt for acquisitions.

Guangzhou-based Evergrande acquired 324 million shares, it said in a statement to the Hong Kong stock exchange on Monday. It bought 314 million shares through block trades and 10 million shares on the open market, according to the statement.

“Given the strong financial results of Shengjing Bank, the acquisition is a reasonable investment” for Evergrande, the developer said in the statement.

The purchase is the latest in a string of deals by Evergrande, which paid HK$12.5 billion to buy Mass Mutual Tower in Hong Kong in November from Chinese Estates Holdings Ltd., a record price for a commercial building in the city.

Evergrande, controlled by Hui Ka Yan, one of China’s richest men, also agreed to buy 13.5 billion yuan ($2.06 billion) of assets from New World China Land Ltd. in December.

The shares rose 2 percent to HK$5.18 as of 10:27 a.m. in Hong Kong trading, while the benchmark Hang Seng Index was up 0.6 percent. Shenyang, Liaoning province-based Shengjing Bank fell 1.1 percent to HK$12.46.

Evergrande is the most indebted of 20 major Chinese developers tracked by Bloomberg Intelligence. The developer’s net debt-to-equity ratio rose to a record high of 121.8 percent at the end of June, according to data compiled by Bloomberg. In December, the builder issued $1.5 billion of perpetual securities at a 9 percent distribution rate after a streak of acquisitions.

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