First Sponsor unit selling parts of China project for $97m

Mainboard-listed First Sponsor Group's unit, Chengdu Gaeronic Real Estate Co, is selling parts of a mixed-used residential and commercial project, Chengdu Cityspring, for 465 million yuan (S$97 million).

The buyer is Chengdu-based hotel, real estate and finance company Minyoun Industrial Group Corporation.

Chengdu Cityspring comprises six residential buildings, four commercial buildings and 1,272 basement carpark spaces. The sale involves one of the commercial buildings, a retail space and 318 basement carpark spaces.

The property operates under a leasehold that expires in March 2049.

M Hotel Chengdu, a 196-room four-star hotel, occupies parts of the commercial buildings.

Other than the hotel and the carpark spaces, the rest of the property is commercial space in a bare-shell condition.

First Sponsor Group said in a statement that the sale is a good opportunity to dispose of an underperforming asset at a profit. The sale will strengthen its balance sheet, said the property group, whose key shareholders are City Developments and Tai Tak Estates.

The sale price represents an excess of 102.9 million yuan over the net book value of the property as of March 31.

The company intends to use the net proceeds of about 396.7 million yuan to fund its existing operations in China.

A version of this article appeared in the print edition of The Straits Times on May 31, 2018, with the headline 'First Sponsor unit selling parts of China project for $97m'. Print Edition | Subscribe