Gzitic Hualing Holdings, the loss-making refrigerator and air-conditioner maker controlled by the Guangzhou municipal government, is expected to acquire property projects from its parent in about two months, according to sources.
The asset injection will represent the first step majority shareholder Guangzhou International Trust & Investment Corp has taken to diversify and turn around Gzitic Hualing since gaining control of the company in November 1996.
Market sources said property projects were selected from a host of the parent's wide-ranging projects as they were the most accessible.
The property projects would comprise mainly rental office space in Guangzhou with a rate of return of more than 6 per cent.
The assets have been held by the parent for more than three years, making it unnecessary to obtain approval for the purchase from the China Securities Regulatory Commission.
The cost of the acquisition had yet to be determined, as it hinged on the final decision on the assets to be bought, a source said.