First Sponsor sells 70% stake in Dongguan project to China Vanke, Regent Land

FIRST Sponsor Group has tied up with China Vanke and Regent Land Investment Holdings in developing the group's mixed-use project in Dongguan in Guangdong province.

The group said on Monday it had on Aug 19 entered into a share subscription agreement and assignment agreement with subsidiaries of China Vanke and Regent Land for the collaboration.

First Sponsor will retain a significant 30 per cent stake in the project, while Vanke and Regent Land will end up with 55 per cent and 15 per cent interests respectively.

Under the assignment agreement, some 70 per cent of the aggregate outstanding inter-company loans extended by T Co for the Dongguan project will be assigned and transferred to Vanke and Regent in their respective subscription proportion.

The joint venture will allow First Sponsor to tap the extensive experience and business network of Vanke to enhance the value of the project, and share the development risk of the project with the investors.

First Sponsor's net gain from the transaction is expected to be about S$95.3 million based on its latest second-quarter results, with net proceeds amounting to about S$243.4 million.

The proceeds can be redeployed to other opportunities to expand the group's three key property-related businesses and to further finance the property development operations of the project, if necessary, First Sponsor said.