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Hot stock: Developer Ying Li up 6% on Chongqing project divestment
CHINESE property developer Ying Li gained in early trading on Tuesday as it announced it was divesting its stake in a project under construction in Chongqing's central business district (CBD).
The developer's stock was trading at 15.9 Singapore cents, up 0.9 Singapore cent or 6 per cent as at 9.49am on Nov 28.
Ying Li said that it was selling its stake in the Ying Li International Commercial Centre Project, described as a "premium integrated project" comprising of two office tower blocks and a six-storey retail mall, to China Evergrande-linked Shengyu (BVI) Limited for an aggregate sum of 3.29 billion yuan (S$671.9 million) in cash.
The sale to Shengyu involves Ying Li selling its stake in its wholly owned subsidiary Shiny Profit Enterprises, which in turn owns Chongqing Yingli Shiny Profit Real Estate Co, and the separate transfer of a parcel of land in Chongqing, which Ying Li says is not connected to the Chongqing CBD project.
Ying Li says the net proceeds from the transaction, expected to be around 3.29 billion yuan after deducting costs and expenses, will help "realise the capital value" of the Chongqing CBD project, and strengthen the company's finances.