COSCO to exit real estate via stake sale
By Cherry Cao |
December 18, 2010, Saturday
|
Print Edition
Print Edition
COSCO International Holdings Ltd, a shipping services provider and property investor, said it will exit the real estate market by selling its stake in Sino-Ocean Land Holdings Ltd to raise HK$5.32 billion (US$684 million).
A total of 949.9 million shares of Sino-Ocean, a Beijing-based real estate developer, will be sold at HK$5.60 each, about 10 percent above its closing price of HK$5.08 on Thursday, COSCO International said in a filing to the Hong Kong stock exchange.
The State-owned Assets Supervision and Administration Commission said in a statement in March that 78 companies under its supervision, whose core business is not real estate, should pull out of property development because cash-flush government-backed enterprises have long been blamed for bidding up land prices to record levels and keeping smaller property firms out.
Wei Jiafu, president and CEO of COSCO Group, promised publicly in March soon after the SASAC statement that one of its subsidiaries' stakes in Sino-Ocean would be sold within six months. COSCO's share sale plan was later approved by its shareholders in September.
BOC International Holdings Ltd and UBS AG are arranging the share sale, according to the filing.
Only seven of the 78 state-owned firms whose core business is not real estate have so far put their property business up for sale, China Securities Journal reported earlier this month.
Analysts said this could be due to high profit margin in real estate as well as time needed to finish current projects and difficulty in finding buyers quickly.
A total of 949.9 million shares of Sino-Ocean, a Beijing-based real estate developer, will be sold at HK$5.60 each, about 10 percent above its closing price of HK$5.08 on Thursday, COSCO International said in a filing to the Hong Kong stock exchange.
The State-owned Assets Supervision and Administration Commission said in a statement in March that 78 companies under its supervision, whose core business is not real estate, should pull out of property development because cash-flush government-backed enterprises have long been blamed for bidding up land prices to record levels and keeping smaller property firms out.
Wei Jiafu, president and CEO of COSCO Group, promised publicly in March soon after the SASAC statement that one of its subsidiaries' stakes in Sino-Ocean would be sold within six months. COSCO's share sale plan was later approved by its shareholders in September.
BOC International Holdings Ltd and UBS AG are arranging the share sale, according to the filing.
Only seven of the 78 state-owned firms whose core business is not real estate have so far put their property business up for sale, China Securities Journal reported earlier this month.
Analysts said this could be due to high profit margin in real estate as well as time needed to finish current projects and difficulty in finding buyers quickly.
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