Shimao International Holdings, an overseas investment arm under Shanghai-based developer Shimao Group, said yesterday it would buy back its publicly traded shares after the stock was suspended from trading in Hong Kong.
'No further details are available at this moment,' a spokesperson said.
Loss-making Shimao International, whose shares have declined 13.6 per cent in the past year compared with a 26.4 per cent gain in the Hang Seng Index, was last traded at 70 HK cents on April 4.
'The company is taking advantage of its recent low share prices to privatise,' said an analyst close to the management. 'It makes sense because the company's current investments are mostly long-term commitments and won't be profitable for a few years.'
The analyst expected the privatisation price to be as much as a 40 per cent premium to the closing price before suspension.
Shimao International has been involved in commercial developments outside the mainland, including projects in Hong Kong and in and near Russia.
The company made a loss of HK$193.82 million last year, due to provisions for land appreciation tax and a loss on projects it operated near Russia after restrictions imposed by the Russian government.
