GuocoLand, Hong Leong JV wins land tender in China with 1.68b yuan bid

A JOINT venture (JV) of GuocoLand and Hong Leong Holdings (China) (HLHC) will acquire and develop four land parcels in Chongqing, China, for residential use.

This comes after Chongqing municipality awarded the construction land use right for the plots to the JV, GLL Chongqing 18 Steps Pte Ltd, at a bid price of 1.68 billion yuan (S$325.2 million), GuocoLand said in a filing on Friday night.

GuocoLand owns a 75 per cent interest in the JV while HLHC holds a quarter stake.

The acquisition of the land parcels will be financed by capital contributions in proportion to the equity of each JV partner.

Meanwhile, the development of the residential project will be financed by internal resources, external borrowings and shareholders' loans in proportion to the equity of each JV partner.

The transaction is not expected to have a material financial impact on GuocoLand group's net tangible assets per share and earnings per share for the financial year ending June 30, 2020.

The land plots are situated in Liangjiang Xinqu of Chongqing Yubei district area. They span a land area of 141,968 square metres (sq m), with a total above-ground gross floor area of 197,600 sq m.

GLL Chongqing 18 Steps was formerly known as GLL Chengdu Pte Ltd and wholly-owned by GuocoLand, before HLHC subscribed for a 25 per cent stake.

HLHC is a subsidiary of Hong Leong Holdings Limited (HLHL), which is in turn a subsidiary of Hong Leong Investment Holdings, an interested person of GuocoLand under Singapore listing rules.

Singapore-listed GuocoLand is part of Hong Kong-listed Guoco Group, owned by South-east Asia conglomerate Hong Leong Group.

Shares of GuocoLand closed flat at S$1.95 on Friday before the announcement.