FIVE companies have negotiated a $1.2 billion price cut in a $5 billion land deal signed in April. The cut was allowed by the Guangzhou Lands Bureau (GLB) following the withdrawal of Sun Hung Kai International from the consortium.
The deal will mean each party will continue to contribute the same amount of cash.
Yue Xiu Enterprises, a Guangdong government-linked firm, Kwong Sang Hong International, Asean Resources, Peregrine International Holdings, Huey Tai International and Paul Y-ITC Construction Holdings formed a venture called Forward Gain to buy building rights for a 1.6 million square metre site on land designated as a city centre by the GLB.
Details of Sun Hung Kai's involvement were not available. Privately-held Peregrine has a 21 per cent stake in Kwong Sang Hong while Huey Tai owns 73 per cent of Asean.
Under the deal Forward Gain was expected to pay $5 billion in land premium by December last year. But it was renegotiated on March 16 with the premium reduced to $3.8 billion due to Sun Hung Kai's withdrawal. The date for the second of seven payments had been moved from December to last Saturday.
An exit option agreed last year has also been amended with the option to terminate being extended from December to this month.
