SINGAPORE - Mainboard-listed First Sponsor Group said on Monday (Aug 22) it will partner China Vanke and Regent Land Investment Holdings to develop its Star of East River project in Dongguan city in China's Guangdong province.

In a share subscription agreement and assignment agreement with subsidiaries of China Vanke and Regent Land, the two investors will take up 55 per cent and 15 per cent interest respectively in the project. First Sponsor said it will retain a significant 30 per cent stake, enabling it to "participate in any potential upside in the value of the project."

Under the assignment agreement, some 70 per cent of the aggregate outstanding inter-company loans extended by T Co for the Dongguan project will be assigned and transferred to Vanke and Regent in their respective subscription proportion.

First Sponsor said the joint venture will allow it to tap on the extensive experience and business network of Vanke, one of China's largest property developers, to enhance the value of the project, and to share the project's development risk.

It estimated net gain from the transaction, which is expected to be completed in Oct 2016, at approximately S$95.3 million and net proceeds at around S$243.4 million.

First Sponsor added that the proceeds can be redeployed in search of other opportunities to expand the group's three key property related businesses and to further finance the property development operations of the project, if necessary.