Socam to streamline with 1.8b yuan sale
Shui On Construction and Materials (Socam) has agreed to sell 1.8 billion yuan worth of Shui On Land shares to a privately-run company owned by its chairman Vincent Lo Hong-shui.
Analysts said the proposed sale was aimed at streamlining the group's structure. Socam is expected to gradually sell its entire stake in Shui On Land to Mr Lo's company.
Socam said it would sell 228.7 million Shui On Land shares to Shui On Investment at a minimum of HK$7.87 each, 211.8 million Shui On Land shares at a maximum of HK$8.50 each.
Shui On Investment is wholly owned by Mr Lo's Shui On Company which owns a 53.77 per cent stake in Socam.
The proposed sale would cut Socam's stake in Shui On Land, also chaired by Mr Lo, to between 12.38 per cent and 12.78 per cent, depending on the final selling price.
Mr Lo's stake in Shui On Land will increase from 35.93 per cent to between 40.99 per cent and 41.39 per cent.
The deal would help Socam to cash in for future development, said UBS analyst Eric Wong.
In May, Socam, together with Shui On Land, said they planned to take a 70 per cent stake in a 15 billion yuan software park in Dalian, Liaoning province.
The project, the second phase of Dalian Software Park, has a gross floor area of about 3.9 million square metres and is due for completion in eight to 10 years.
The software park's first phase opened in 1998 with a gross floor area of 1.6 million square metres. It had attracted 340 software firms to take up more than 95 per cent of available office space, Shui On said in March.
Shares in Socam fell 2.69 per cent to HK$27.10 yesterday while Shui On Land shares closed down 0.88 per cent at HK$7.80.