China developer CR Land seeks US$260 million from stake sale in property services arm
Move to sell 2.17 per cent stake in CR Mixc Lifestyle aimed at improving market confidence in the stock and acquiring land reserves
CR Land agreed to place 49.5 million shares of CR Mixc Lifestyle at HK$41.70 each, according to a filing to the Hong Kong stock exchange on Thursday. It represented a 9.58 per cent discount to the subsidiary’s last closing price of HK$46.12, and a 1.3 per cent discount to the five-day average.
The transaction was expected to generate net proceeds of around HK$2.06 billion, which CR Land said would be used for acquiring land reserves, funding development costs, and general working capital. UBS Hong Kong is the sole placing agent.
Upon completion of the deal, CR Land’s stake in CR Mixc Lifestyle will decrease to 70.12 per cent, though the subsidiary will remain consolidated into the group’s financial statements. The ultimate controlling shareholder, China Resources Company, will see its indirect interest reduced to about 71.55 per cent.
The company said the disposal was intended to broaden the shareholder base of CR Mixc Lifestyle and enhance the stock’s liquidity, which it believed would help improve market confidence and support long-term valuation. The pricing and terms of the placement were determined through arm’s-length negotiations and were “fair and reasonable”, it added.