Shares of Chinese developer Shimao rise nearly 5% after further asset disposals
HONG KONG: Shares of cash-strapped Shimao Group rose on Monday after the Chinese developer and its chairman sold a hotel in Shanghai and a stake in a development in Hong Kong, respectively, for a total of 836 million dollars, in their latest efforts to raise funds.
The disposals come after Shimao put its assets worth 77 billion yuan ($12.11 billion) up for sale to raise funds to pay off debts, offloading two other assets in the past two weeks for 3 billion yuan.
The Shanghai-based developer said late Friday that it sold Hyatt on the Bund to state-owned Shanghai Land (Group) Co for 4.5 billion yuan.
Its chairman Hui Wing Mau also sold his 40% stake in a high-end Hong Kong residential development to Hong Kong investors CSI Properties and CC Land Holdings for HK$1.05 billion ($134.68 million), according to separate statements from buyers on Friday evening.
China’s state-owned property companies are set to acquire more assets from private developers facing tight liquidity, analysts say, as Beijing steps up efforts to stabilize and tighten control over a crisis-hit sector that accounts for a quarter of its economy.
Financial media Cailianshe reported over the weekend that a state-owned healthcare real estate company in the northeastern province of Shandong could become the majority shareholder of Chinese group Aoyuan, and that it has completed the preliminary due diligence.
Shares of Shimao gained 4.8%, while Aoyuan rose 6.8%. The Hang Seng Mainland Properties Index rose 2.2%.
($1 = 6.3605 Chinese Yuan)
($1 = HK$7.7962)
(Reporting by Clare Jim; Editing by Jacqueline Wong)