SHIMAO Property Holdings Ltd plans to inject a 100-percent interest in nine commercial property project companies, Beijing Shimao Tower and approximately 750 million yuan (US$99.7 million) into Shanghai Shimao Co Ltd in exchange for shares, the company said yesterday.
The restructuring, which still requires the approvals of both companies and the regulatory watchdog, will enable Shimao Property, an integrated real estate developer owned by billionaire Xu Rongmao, to indirectly own a 64-percent stake in Shanghai Shimao, the firm said in a statement to the Hong Kong stock exchange.
The transaction will enable Shanghai Shimao to acquire 10 commercial properties at various stages of development located in Shanghai, Beijing, and the provinces of Jiangsu, Zhejiang, Liaoning and Anhui. The properties have an aggregated gross floor area of four million square meters. The total value of the transaction is expected to surpass 8.3 billion yuan, according to the statement.
Plans on the coast
After the transaction, Shimao Property will primarily engage in residential properties and hotel business while Shanghai Shimao will focus on the development and management of commercial property projects, the statement said.
On October 17, Shimao Property announced it acquired a 90-percent interest in Shanghai Bicheng Real Estate Co Ltd, giving it the development rights to a plot of land on the coast in Shanghai's Fengxian District.
With a total gross floor average of 350,000 square meters, the site will be developed into a residential complex comprising sea view apartments and townhouses. The project is scheduled to be completed by stages in 2008 and 2009, the company said.
The Bicheng deal also gives Shimao Property a 45.9-percent equity interest in the Shanghai Silver Star Tower project, which has an aggregate gross floor average of 16,000 square meters.
Shimao Property said in mid August its first-half profit tripled to 2.08 billion yuan due to strong sales growth in residential, hotel and commercial properties.