NewMainland China developer Sunac receives HK$6.2 billion as Greentown deal ends

Mainland developer Sunac China announced on Monday that HK$6.2 billion yuan had now been returned to it, terminating the year’s largest property acquisition.

The Tianjin-based luxury home builder signed an agreement in May to buy 24.313 per cent of peer Greentown China for HK$6.3 billion, or HK$12 a share in cash, from Greentown chairman Song Weiping, his wife Xia Yibo and chief executive Shou Bainian.

But Song said last month the sale was a mistake as the corporate cultures did not blend and he signed a new contract last week to sell 24.288 per cent of Greentown China shares to state-owned construction firm China Communications Construction Group for HK$6.01 billion so that he could pay back the HK$6 billion already received from Sunac before February 12.

Sunac said it had received HK$6.2 billion for the principal and interest accrued as of Monday and had released the share charge, marking the end of a deal that industry analysts said could have benefited both firms by blending Sunac’ sales team and Greentown’s branding.

Sunac staff posted to Greentown will return to Sunac. The fate of a joint venture between the two developers in Shanghai has yet to be clarified.