Shares of Road King Infrastructure, one of the mainland's biggest toll-road operators, jumped 5.67 per cent yesterday after the company said it was paying 370 million yuan in cash and assumed debt to buy a troubled Suzhou-based property developer.
The stock jumped to as much as HK$12 before closing at HK$11.92, not far from its record close of HK$12.20 on October 24.
Under the deal, Road King will pay 49.3 million yuan and assume 320.7 million yuan in debt to acquire all the shares of Suzhou Sunco, a developer which owns an undeveloped 672,000 square metre site in the Suzhou Industrial Park, and the Phoenix Land residential project, which has 197,179 square metres of unsold space.
Road King owns six other properties in Guangzhou and Changzhou.
Suzhou Sunco reported a net loss of 100.29 million yuan in the first six months of this year as it cut prices to raise cash to resolve a financial crisis. The book value of Suzhou Sunco's property assets was 3.48 billion yuan on June 30.
Phoenix Land is a mid-to-upmarket residential project located in Suzhou's city centre.
