Chinese property tycoon to sell stake as share sales ramp up
THE billionaire owner of Country Garden Holdings is selling a stake in a unit to raise about US$650 million amid a flurry of share sales by cash-strapped Chinese developers.
Yang Huiyan agreed to sell 237 million shares of Country Garden Services Holdings at HK$21.33, according to a statement to the Hong Kong stock exchange on Sunday (Dec 11). That represents a 10.9 per cent discount to the latest closing price.
Yang is co-chairman of Country Garden, the real estate giant founded by her father, and chairman of its property management spinoff Country Garden Services. Bloomberg reported the sale plans last week. The 41-year-old has an estimated net worth of US$12.1 billion, according to the Bloomberg Billionaires Index.
Country Garden has tapped the Hong Kong equity market twice in the past month, raising more than US$1 billion to shore up finances that have been hurt by an unprecedented housing slump. Chinese developer shares have soared in recent weeks as authorities unwound a clampdown on leverage by encouraging fundraising through bond and stock sales as well as bank loans.
“The share sale of Country Garden Services will boost bond investor sentiment,” said Daniel Fan, senior credit analyst at Bloomberg Intelligence. “The chairman could lend part of the proceeds to Country Garden Holdings for debt servicing, or she could use it to buy back bonds in the market for her own.”
Some of Country Garden’s dollar bonds were indicated as much as 1 cent higher on Monday morning, according to Bloomberg-compiled prices.
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A Bloomberg Intelligence gauge of Chinese developers’ shares has soared 88 per cent since the end of October.
Seazen Group agreed to sell shares to raise HK$1.96 billion (S$341 million) in a placement, the developer said in a stock exchange filing on Monday. The deal will provide funding to repay offshore debts and use as general working capital, it said.
Meanwhile, CIFI Holdings Group announced plans to sell a stake in a unit to create liquidity and reduce leverage. It invited potential bidders to buy shares of its CIFI Ever Sunshine Services Group and commenced preliminary discussions on the bidding process, a filing showed on Monday.
CIFI defaulted on a convertible bond in October and has since e suspended offshore financing payments, highlighting deepening stress in the property sector. The company plans to present a holistic solution to its creditors and other stakeholders no later than the first quarter of 2023, it said.
Agile Group Holdings, which develops villa apartments and high-rise homes set amid landscaped gardens, tapped the secondary market in Hong Kong last month, raising just over US$100 million. Last week, it amassed another US$63.5 million through the sale of units in A-Living Smart City Services.
As well as in Hong Kong, equity fundraising has picked up in mainland China after the government last month ended a ban on listed companies selling more shares at home. Some 17 listed Chinese property developers or firms with real estate businesses announced plans to raise more equity funds, the Financial News reported last week. BLOOMBERG
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