Shimao Property Holdings, controlled by billionaire Hui Wing-mau, will transfer 7.7 billion yuan worth of assets to Shanghai Shimao as part of a group restructuring that will give it a majority stake in the Shanghai-listed firm.
The deals would also allow Shimao Property to gain exposure in the mainland market through Shanghai Shimao, so it could raise more funds at a lower cost of capital, Jason Hui, an executive director of Shimao Property, told the South China Morning Post.
Shimao Property will inject 10 retail and commercial projects in exchange for 630 million of Shanghai Shimao's A shares at 12.05 yuan each, representing a 49.8 per cent discount to the stock's Monday close of 23.99 yuan.
Shimao Property will also buy 750 million yuan worth of Shanghai Shimao shares through its partly owned Shanghai Shimao Enterprise Development, bringing its effective stake in the Shanghai-listed company to 64.2 per cent.
Mr Hui said his company aimed to lift the stake in Shanghai Shimao to 74.3 per cent by buying out Shimao Enterprise.
The deals would generate a one-off gain of 1.2 billion yuan, which could be booked into the company's accounts in the first half of next year, Shimao Property said.