China property company poised to raise $375m

PUBLISHED : Tuesday, 29 October, 1996, 12:00am
UPDATED : Tuesday, 29 October, 1996, 12:00am

Chinese Estates Holdings says it will spin off its mainland property and development wing as Evergo China Holdings.

Under the proposal, 300 million shares, or 25 per cent of the 1.2 billion Evergo shares on issue will be distributed to shareholders as a special interim dividend.

Chinese Estates stands to raise as much as $375 million by the spin-off, based on analysts' estimates of Evergo's share price at $1.20-$1.25. The pricing will represent a 30 per cent discount to the proposed company's net asset value.

The dividend, which will not be available to overseas shareholders, will be on the basis of 623 Evergo shares for every 4,000 shares of Chinese Estates held.

Dealing in Evergo is expected to begin on the stock exchange on November 20.

It would focus on property development and investment in major or emerging cities, Chinese Estates said.

Joseph Lau Luen-hung, who holds 54.4 per cent of Chinese Estates, will place 13.5 per cent of its issued shares privately, representing his entitlement to the special dividend.

Mr Lau and his brother, Thomas Lau Luen-hung, will be directors of both Chinese Estates and Evergo.