China Int'l to sell loss-making Tianjin unit for 460m yuan

Singapore

INVESTMENT holding company China International Holdings (CIH) has inked a deal to sell a loss-making property-development unit for 460 million yuan (S$94.4 million) in cash, it said in a Singapore Exchange (SGX) filing on Tuesday.

The unit, Tianjin Xinzhong Property Development Co, holds the rights and benefits for the group's Tianjin Jixian project, which comprises the land use rights for some land in the North Shore of Cui Ping Lake Tourist District, east of Jixian, or Ji county, in Tianjin, the group said. Tianjin is a city in northern China.

The buyer is Beijing Hongkunweiye Property Development Co, a property management and development company.

CIH said the Tianjin Xinzhong unit had been in the red since 2010 and was non-operational, which meant it had "not contributed positively to the group's core business" from 2010 to 2015 and was "not able to generate revenue from sales without further injections of working capital for the development of the Tianjin Jixian project".

However, the Tianjin Jixian project had an "interim" market value of 350.11 million yuan as at June 30, 2016 and selling off the unit would help reduce CIH's debt, it said.

It said it had bought the Tianjin Jixian project in July 2010 for development into residential and commercial areas and that the land has a total site area of 121,778.9 sq m. It estimated the net proceeds from the disposal would be 421.51 million yuan.

CIH added that although the proposed sale constituted a "major transaction" under SGX listing rules, the group believes it should not need to get the green light from shareholders for the disposal and will try to get SGX to waive the shareholder approval requirement.

CIH halted trading on Sept 30 "pending release of an announcement", and said on Tuesday trading will resume on Oct 5. Before the halt, its shares had shot up 16 per cent or 1.8 Singapore cents to S$0.13 on Sept 29.