UPDATE 1-Indebted China developer Evergrande prices share offer at steep discount; stock tumbles

* New shares priced at 18 pct discount to Wednesday close

* Price also below Thursday's indicative range

* Stock falls to lowest since at least 2009

* Investors worried about Evergrande's debt, analysts say (Adds comments, details, context)

By Clare Jim and Saikat Chatterjee

HONG KONG, May 29 (Reuters) - Shares in Evergrande Real Estate Group Ltd plunged to their lowest in at least six years on Friday after one of China's biggest and most-indebted developers sold new shares in Hong Kong at a steeper-than-expected 18 percent discount.

In an exchange filing, China's fourth-largest developer by sales said it had raised HK$4.6 billion ($593 million) in the Thursday offer, slightly less than its target of up to HK$4.75 billion.

The company, however, increased the amount of shares it was offering, and cut the price to HK$5.67 each from an indicative price range of up to HK$6.36. The new price was also nearly 18 percent below the stock's closing price on Wednesday.

Analysts said investors were unwilling to pay a premium for Evergrande because of concerns about its leverage.

The stock fell as much as 24 percent, to its lowest since at least 2009, after the placement. Traders said the more-than-2 percent fall on Thursday in the broader Hong Kong market also pressured Evergrande's stock.

"We don't expect the fundamentals to improve greatly after this sale," said Yin Chin Cheong, credit analyst at research firm Creditsights in Singapore. "It will have some effect in reducing the debt burden for the company but not much."

Evergrande is the most indebted of China's top 10 developers and in March received a $16 billion credit lifeline from banks as it struggled with a prolonged slump in the property sector. It has also cut leverage on its balance sheet over the past two years by classifying some debt as equity, an accounting treatment that, while legal, masks the amount of debt it actually holds, according to analysts.

Evergrande said it was raising funds for refinancing and working capital. The new offer represents just over 5 percent of its enlarged share capital.

It follows peers including state-backed China Resources Land and Greenland Hong Kong, which this month raised over HK$15 billion through share placements, taking advantage of a recent stock market rally.

Evergrande is due to pay a 171 million yuan coupon on July 19 on its yuan-denominated bond maturing in January 2016 , according to Reuters data.

As of Thursday, Evergrande's stock was up 120 percent from the beginning of the year, outperforming the nearly 17 percent rise in the broader market. Charles Macgregor, Asia head of researchers Lucror Analytics, said the discounted price may represent the "fair value" of the stock.

(1 = 7.7532 Hong Kong dollars) ($1 = 6.2000 Chinese yuan renminbi) (Editing by Stephen Coates and Miral Fahmy)