SINGAPORE-listed China developer Ying Li International Real Estate says it intends to seek shareholders' approval to bring in China Everbright Limited (CEL) as its strategic and second largest shareholder.
It said in a statement on Monday that it is proposing to issue new shares and perpetual convertible securities to Everbright Hero Holdings Limited (EHHL) for an aggregate of approximately $284 million.
EHHL is an indirect wholly-owned subsidiary of CEL, the asset management arm of China Everbright Group, a major player in mainland China.
CEL is listed on the Hong Kong Stock Exchange.
If the deal gets regulatory and shareholder approvals, CEL will become the second largest shareholder of Ying Li after the share subscription, ranking next to Mr Fang Ming, the executive chairman and chief executive of the group.
Ying Li said it will use the money raised to accelerate development of existing projects and finance new projects.
It also aims to leverage on CEL's network and strong connections to secure projects in prime locations in the first- and leading second-tier cities in China, as well as seek expansion into Singapore and Hong Kong.
Mr Fang said:"Post-transaction, our balance sheet will be strengthened, which will put us in a robust position to capture quality projects in China. We plan to capitalise on CEL's expertise in retail property management to extract greater value from our existing commercial properties. We also aim to leverage on CEL's extensive network and strong connections to expand our presence in the first- and leading second-tier cities in China and in Hong Kong and Singapore."
CEL CEO and executive director Chen Shuang said: "We like Ying Li's strategy of focusing on high-quality commercial and retail property development and urban renewal in the Chongqing central business district which is less affected by the current turmoil in the China real estate sector. We believe this strategic cooperation can provide complementary advantages and bring about mutual benefits to each other."
Ying Li's shares added 1 cent to 29.5 cents as at 12.25pm on Monday. It requested a trading halt since last Wednesday pending Monday's announcement, which was made prior to markets opening at 9am.