GuocoLand unit sells Guoman Hotel in Shanghai for 1.4 billion yuan in cash

A China unit of mainboard-listed property developer GuocoLand will sell Guoman Hotel in Shanghai and 256 of its underground carpark spaces for 1.44 billion yuan (S$290.7 million) in cash. 

The net book value of the real estate is about 509.5 million yuan as at March 31, and GuocoLand is expected to record a net gain of S$90.6 million.

The deal will be paid for with cash in four instalments, with the first instalment of 288.2 million yuan to be paid upon the execution of the agreement. 

As part of the deal, the China subsidiary may also sell up to another 44 underground carpark spaces to the buyer, Shanghai Zhengjiu Industrial Co, at 160,000 yuan per space.

The subsidiary said that it has received 1.4 million yuan from the buyer as "earnest money" for this sale, although if the sale does not go ahead, it will return the sum. 

Net proceeds from the transaction will be used for GuocoLand's general working capital, including to repay debts. 

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Shares of GuocoLand closed at S$1.30 on Thursday, down 0.76 per cent.