Wednesday 13 December 2017

Sunac to buy Greentown share in real estate deals

Sunac China holdings has taken over assets held by rival Greentown China
Sunac China holdings has taken over assets held by rival Greentown China

Michelle Yun

Sunac China Holdings reached a preliminary agreement to buy Greentown China Holdings' share in some real estate assets after the two Chinese developers quarrelled over the transactions earlier this year.

Greentown will sell its 50pc stakes in two ventures it controls with Sunac, the two companies said in separate statements to the Hong Kong stock exchange. Greentown expects to receive 3.39bn yuan (€488m) in cash if the transactions are completed and a gain from the disposal of 781.4m yuan, it said.

Greentown, based in Hangzhou in eastern China, said in January it hadn't approved Sunac's 15.5bn yuan purchase of their joint assets and called its partner's actions unilateral. The companies last year terminated plans for Tianjin-based Sunac to take a stake in the Hangzhou developer after Greentown's chairman said the two firms "don't blend."

The latest arrangement seeks to resolve the dispute and "set out an agreed approach on terminating the various joint ventures between the company and Sunac," Greentown said in its statement. It will seek shareholder approval for the framework before signing any definitive contracts with Sunac, it said.

In the latest proposed deal, Greentown will also buy Sunac's stake in some projects, including a Shanghai residential development.

Sunac is seeking to buy distressed rival Kaisa Group as it eyes expansion to southern China. The acquisition has been complicated by a offshore debt default by Kaisa and a return of the target company's chairman.

Shares of Greentown rose 1.3pc to the highest since February 2014. They have gained 39pc in 2015. The Hang Seng Index has gained 20pc this year. (Bloomberg)

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