Firm's land and hotel deals set to boost capital
By Cao Qian |
March 2, 2011, Wednesday
|
Print Edition
Print Edition
HONG Kong-listed Shanghai Industrial Holdings Ltd, whose core businesses include infrastructure, real estate and consumer products, has recently agreed to sell a 77 percent interest in Shanghai's Four Seasons Hotel.
It will also sell a 90 percent stake in two land parcels in Qingpu District to Hong Kong's Chow Tai Fook Enterprises Ltd.
The two plots, designated for residential purposes and covering 750,000 square meters, would fetch a combined 2.436 billion yuan (US$370 million), while the stake in the five-star hotel on downtown Weihai Road in Jing'an District would cost HK$1.168 billion (US$150 million), according to a statement filed by Shanghai Industrial over the weekend to the Hong Kong stock exchange.
Net profit from the three deals is expected at about HK$2.867 billion, said Shanghai Industrial, the largest overseas enterprise set up by the city government.
"The disposal of interests in the two land plots will provide opportunities for us to introduce a strategic partner and therefore help enhance the overall quality of property development in the Qingpu project," said Teng Yilong, chairman of Shanghai Industrial. "Moreover, the deals will provide the company with a significant amount of capital which will be very important to both the real estate development in Qingpu as well as the company's future business growth."
Besides the two plots sold to Chow Tai Fook, Shanghai Industrial also owns the entire or majority shares in five neighboring parcels covering a total area of more than 2 million square meters.
After the completion of the hotel transaction, Shanghai Industrial said it will still own about 10 percent of the hotel.
The land deals will leave a "positive" impact on Shanghai Industrial's future operations while disposal of the hotel stake won't likely affect the company's future profit growth, Guotai Junan Securities said in a report.
It will also sell a 90 percent stake in two land parcels in Qingpu District to Hong Kong's Chow Tai Fook Enterprises Ltd.
The two plots, designated for residential purposes and covering 750,000 square meters, would fetch a combined 2.436 billion yuan (US$370 million), while the stake in the five-star hotel on downtown Weihai Road in Jing'an District would cost HK$1.168 billion (US$150 million), according to a statement filed by Shanghai Industrial over the weekend to the Hong Kong stock exchange.
Net profit from the three deals is expected at about HK$2.867 billion, said Shanghai Industrial, the largest overseas enterprise set up by the city government.
"The disposal of interests in the two land plots will provide opportunities for us to introduce a strategic partner and therefore help enhance the overall quality of property development in the Qingpu project," said Teng Yilong, chairman of Shanghai Industrial. "Moreover, the deals will provide the company with a significant amount of capital which will be very important to both the real estate development in Qingpu as well as the company's future business growth."
Besides the two plots sold to Chow Tai Fook, Shanghai Industrial also owns the entire or majority shares in five neighboring parcels covering a total area of more than 2 million square meters.
After the completion of the hotel transaction, Shanghai Industrial said it will still own about 10 percent of the hotel.
The land deals will leave a "positive" impact on Shanghai Industrial's future operations while disposal of the hotel stake won't likely affect the company's future profit growth, Guotai Junan Securities said in a report.
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