China Evergrande says its Vanke shares are assets ‘available for sale’
China Evergrande Group, the country’s largest property developer, said it has no plans to buy more China Vanke shares.
Evergrande said its interest in Vanke, China’s second-largest developer, will be accounted for as available-for-sale financial assets and the results of Vanke will not be consolidated into its financial statements, according to a filing to the Hong Kong stock exchange Friday morning.
The move comes a day after China Resources Holdings agreed to sell its entire shareholding in Vanke to state-backed Shenzhen Metro Group.
The Shenzhen-based subway operator will buy the entire 15.31 per cent shareholding in Vanke from China Resources, Vanke said in a statement to the Hong Kong exchange on Thursday.
Under the agreement Shenzhen Metro will pay 37.2 billion yuan, or 22 yuan per share to buy 1.69 billion of the company’s A-shares listed in Shenzhen. The price amounts to a 7 per cent premium from Vanke’s last closing price of 20.4 yuan.
In selling its shares, China Resources, the state-owned conglomerate and a long-term investor in Vanke, has effectively withdrawn from the battle for control over the Shenzhen-based developer, leaving Shenzhen Metro as the apparent winner.
Baoneng Group – the insurance conglomerate controlled by China’s fourth richest man, Yao Zhenhua – holds the largest stake in Vanke with 25.4 per cent, followed by China Evergrande Group with 14.07 per cent.