SINGAPORE - Mainboard-listed Chinese property developer Ying Li International Real Estate announced on Tuesday (Nov 28) it is selling its stake in a project in Chongqing's central business district (CBD) to Shengyu (BVI) - part of the China Evergrande Group - for 3.29 billion yuan (S$671.9 million) in cash.
Under the terms of the deal, slated to close before the end of November, Shengyu will pay 2.77 billion yuan for the Ying Li International Commercial Centre Project, and a further 514.7 million of land tender deposits, which Ying Li has already paid for.
A further amount of 520 million yuan remains payable by Ying Li with respect to the company's acquisition of the land parcel.
Shengyu will also take on all existing liabilities of around 898 million yuan in Shiny Profit Group - Ying Li's subsidiary which owns the Chongqing CBD project.
Ying Li said that the transaction will help realise the capital value of the Chongqing CBD project and strengthen the company's finances, with net proceeds going towards reinvestment in other property projects, repayment and borrowings and general working capital.
Fang Ming, Ying Li's executive chairman and chief executive, said that the divestment will help the company redeploy its capital to other fast turnaround projects with shorter completion cycles.
Shiny Profit recorded a loss before tax of 4.41 million yuan for the nine months ended Sept 30, with zero revenue. Its net tangible assets totalled 1.36 billion yuan for the same period, counting towards 27.1 per cent of Ying Li's net assets.
The commercial project, formerly known as the Ying Li Chongqing Financial Street Project, is located in Chongqing's Jiefangbei CBD and currently under construction. It is described as a "premium integrated project" comprising of two office tower blocks and a six-storey retail mall, which sits on two prime land parcels totalling roughly 18,400 square metres, and features a gross floor area of around 320,000 square metres.
The deal will be paid for over several tranches upon the fulfillment of certain milestones or conditions, and was arrived at on a willing-buyer, willing-seller basis, says Ying Li.
