The company, the most indebted developer in China, made the request in a letter to the government of southern Guangdong province dated Aug. 24, according to three people who confirmed the letter's authenticity.
Evergrande said late on Thursday that a document circulating online about a reorganisation of its subsidiary Hengda Real Estate was a fabrication and defamation, and said it has reported the matter to public security authorities.
Sources said Evergrande's letter had asked the local government to support its plan to gain a listing for Hengda on China's A-share market by buying a company that was already listed in Shenzhen. The plan was announced in 2016 but has yet to receive regulatory approval.
It did not spell out exactly what sort of support it was seeking, but urged the local government to pay attention to the matter and help to coordinate some progress on the listing.
Evergrande's Hong Kong-listed shares tumbled 5.8% earlier in the day on Chinese online media reports about the request.
Evergrande said in the letter that Hengda must repay 130 billion yuan ($19.05 billion) it raised from investors for the plan. Those funds and a bonus of 13.7 billion yuan must be paid before Jan. 31, 2021, it said.
If the reverse takeover falls apart, it may lead to a series of systematic risks, Evergrande said in the letter. Such plans to take over already-listed firms are also sometimes referred to as "backdoor listings".
This would increase the debt level of Hengda to more than 90%, ultimately lead to defaults of the group and increase social instability due to job losses, the letter said.
China's policymakers have become increasingly concerned about debt growth among property developers as they look to contain risks to the financial system, with new rules tightening their bond sales to take effect from next year.
Evergrande had outstanding liabilities and interest amounting to 835.5 billion yuan as of end June, involving 128 banks and 121 non-banking institutions, according to the letter.
Evergrande said earlier this month that it offered a 30% discount on properties for a month amid government moves to control the level of liquidity in the real estate market.
The property sector is a major economic growth driver in China, but policymakers are concerned about the risks of price bubbles after emergency stimulus measures and interest rate cuts earlier this year to reduce the economic fallout from the coronavirus crisis.
Evergrande has been seeking a backdoor listing by a planned injection of almost all of its property assets into ShenZhen Special Economic Zone Real Estate & Properties Group Co Ltd.
($1 = 6.8237 Chinese yuan renminbi)
(Reporting by Clare Jim in Hong Kong; with additional reporting by Zhang Yan and Yawen Chen in Beijing; Editing by Kim Coghill)
