Legend sells 42 property projects to Sunac for 13.8 billion yuan

Disposals effectively means an exit from property, allowing it to focus on other sectors including financial services, healthcare, agriculture and food

PUBLISHED : Sunday, 18 September, 2016, 9:11pm
UPDATED : Sunday, 18 September, 2016, 9:11pm

Legend Holdings, the mainland technology and financial firm, has agreed to sell 42 property projects to developer Sunac China for a total of 13.79 billion yuan, the companies jointly announced on Sunday in a stock exchange filing.

The projects being sold are spread across 16 mainland cities including Beijing, Tianjin, Chongqing, and Hangzhou, cover an aggregate site area of about 6,937,180 square metres, a total gross floor area of approximately 18,022,199 sq m, and an unsold area of about 7,300,535 sq m.

The deal includes equity interest in some 40 companies that hold the rights to the property projects, as well as the onshore and offshore debt related to them.

Legend said in its statement the disposals will allow it to focus on “dedicated industries and exit from the real estate development business”.

It added the company’s directors are of the view that the disposals will allow it to realise its investments in real estate development business as a whole, and strengthen the overall liquidity and financial position of the group.

It said the sell off will enable it to invest and develop in sectors such as “domestic and overseas financial services, healthcare services, agriculture and foods and innovative consumer services” as well as “capitalise and enhance overall returns and create more value for shareholders”.

Legend said after repaying all outstanding debt in its real estate development business, of around 7.5 billion yuan, net proceeds from the deals would be used to invest in its core business.

The transaction is expected to incur a loss to Legend shareholders of about 150-300 million yuan, but the final figure will not be determined until completion of the deal.

Sunac, meanwhile, said the deal would allow it to expand its property development in major and second-tier mainland cities.

It was noted that Li Qin, an independent non-executive director of Sunac China and chairman of the board of supervisors of Legend Holdings, abstained from voting on the deal.

Both companies still need their shareholders approval before it’s complete.