Firm to tap market via asset injection
Updated: 2007-08-01 11:09
When overseas-listed red-chips seek to float on the A-share market, property firm Shimao Property intends to tap the market in an alternative way of acquiring its A-share sister company - Shanghai Shimao via asset injection.
A spokesperson of Shimao Property said the group is contemplating a combined approach to acquire 64 percent of Shanghai Shimao's interest.
"Shimao Property will inject 12 commercial projects into Shanghai Shimao, as well as subscribe its shares via an unlisted subsidiary Shimao Enterprise," said the spokesperson.
For the first part, Shimao Property will inject 12 projects including Huaping Plaza in return for acquiring 630 million shares of Shanghai Shimao, valued approximately 6.73 billion yuan.
The second part is to indirectly subscribe the stakes of Shanghai Shimao, of which Shimao Property will initially purchase 51 percent of Shimao Enterprise for 750 million yuan.
Shimao Enterprise will then subscribe 70 million shares of Shanghai Shimao at 10.68 yuan per share.
Xu Shiyong, the nephew of Shimao Property chairman Hui Wing-mau, is now the largest shareholder of Shimao Enterprise, owning 93 percent stakes.
The solution will end up with Shimao Property owning 64 percent of Shanghai Shimao with a total cost of 6.13 billion yuan.
Given that shares of Shanghai Shimao recently are lingering at 23.38 yuan per share, the effective price Shimao Property paid will have about 65 percent discount against the market price.