Cofco to inject HK$14b assets into Hong Kong unit
The shifting of mainland properties into Hong Kong Parkview is part of the food company's back-door listing that will boost financing options
Cofco, the mainland's largest food trader and processor, is injecting mainland property assets valued at HK$14.17 billion into its Hong Kong-listed property unit, Hong Kong Parkview Group, in a back-door listing.
The asset injection - covering commercial, office and hotel properties - will make Hong Kong Parkview "the overseas-listed platform of Cofco, holding its mixed-use complexes as well as other commercial properties", Hong Kong Parkview said in an announcement to the Hong Kong exchange yesterday.
Hong Kong Parkview will be renamed Cofco Land after the deal is completed.
Hong Kong Parkview will buy shares in Cofco's companies - which own properties in locations such as Beijing, Chengdu, Hainan and Shanghai - through the sale of 2.32 billion new shares to institutional investors.
The shares will be sold at HK$2 each, representing a discount of 50 per cent on the previous closing price of HK$4 on September 17.
Hong Kong Parkview, which resumed trading yesterday, saw its shares close 8 per cent lower at HK$3.68.
In July last year, Cofco (HK), a wholly owned subsidiary of the mainland food giant, announced its acquisition of a controlling stake in Hong Kong Parkview, in a bid to turn it into a listing vehicle for Cofco's property businesses.
"This stock had attracted too much speculative buying. The huge discount [compared with its latest close] means that speculators had expected too much, said Li Kwok-suen, a fund manager at Phillip Capital Management.
Hong Kong Parkview said it would be "in a favourable position to obtain financing on competitive terms from banks and other financial institutions" after the asset acquisitions from its parent firm.
Cofco had been one of a number of mainland property developers seeking a back-door listing in Hong Kong since early last year, with listing on the mainland difficult amid property curbs. Analysts said back-door listings also helped ensure sufficient financial strength for companies.
Others developers seeking listing status in Hong Kong have included Dalian Wanda Holding Group, which acquired a controlling stake in SPG Land (Holdings), and China Vanke, the country's largest listed property developer by sales, which bought Winsor Properties.
Yesterday's announcement said the assets to be injected by Cofco comprised 12 properties, including Chengdu Joy City in Chengdu and Beijing Cofco Plaza in Beijing.