Yum China Holdings Inc, which is being spun off from KFC owner Yum Brands Inc (YUM.N), filed with regulators on Wednesday to issue 10 million common shares to certain participants in Yum incentive plans.
Yum Brands, which also owns Pizza Hut, said in October that it would spin off its China operations through a distribution of common shares to its shareholders.
The 7,200-restaurant China division, which operates in over 1,100 cities, is higher risk and potentially more rewarding, while Yum Brands sans the China division is likely to be more stable with greater cash flow.
The China business has been besieged by food scandals, marketing missteps and a weakening Chinese economy.
Last year, Yum Brands was put under pressure by activist shareholder Keith Meister of hedge fund Corvex Management who was later appointed to the company's board.
Yum China had applied to list its common stock on the New York Stock Exchange under the ticker symbol "YUMC".
(Corrects headline to say Yum employees, not Yum Brands shareholders. The story was earlier corrected to remove incorrect reference to Yum China receiving proceeds)
(Reporting By Sudarshan Varadhan in Bengaluru; Editing by Maju Samuel)