Chinese developer Shimao's unit to sell stake in special purpose vehicles
Add BT as a preferred source[SHANGHAI] Chinese developer Shimao Group Holdings said on Friday its unit Fortune Spring Ventures would sell the stake it holds in three special purpose vehicles for US$267.89 million.
The deal comes as Chinese developers, led by those including Evergrande and Kaisa Group, grapple with liquidity crunches amid tighter regulations.
Shimao said its unit would sell 22.5 per cent of the issued share capital in each of Asia Bright Development, Star Galaxy and Grand Victoria Finance. The three special purpose vehicles manage and develop a property development project in South West Kowloon, Hong Kong.
It added the stake sale would provide additional working capital for the group and improve cash flow, while also flagging a possible loss of about HK$770 million (S$134.6 million) that could be recognised from the disposal.
Shimao was downgraded by two notches by rating agencies Moody's and Fitch on Friday, due to the company's increased financing risks.
The company saw sharp falls in its shares and debt earlier this week, triggered by worries over an asset sale and cancelled apartment deals.
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