Mergers & Acquisitions

Great Wall Pan Asia jumps 15pc after participation in Link Reit deal unveiled

Great Wall Pan Asia has emerged as the second-largest shareholder in the joint venture buying shopping centres and car parks from the Link Reit

PUBLISHED : Monday, 04 December, 2017, 11:45am
UPDATED : Monday, 04 December, 2017, 10:36pm

Great Wall Pan Asia Holdings enjoyed a double-digit gain on Monday morning, after announcing it would pay HK$3.19 billion (US$410 million) as part of a joint venture purchasing 17 shopping centres in Hong Kong from Link Reit.

Great Wall Pan Asia, which is part of China Great Wall AMC (International) Holdings, said late on Friday it had agreed to purchase a 29.9 per cent stake in the joint venture that will acquire the Link Reit properties, confirming an earlier report by the South China Morning Post. Shares in Great Wall Pan Asia hit an intraday high of HK$1.94 at midmorning and closed up 7.3 per cent to HK$1.77 in Hong Kong on Monday.

Chinese bad-debt firm emerges as second-biggest partner among buyers of Link Reit’s 17 HK malls

Garden Cruz will own a 51.8 per cent in the joint venture, while Broad Street Investments Holding (Singapore) will own a 18.3 per cent stake. Great Wall Pan Asia will rank as the second-largest shareholder.

The deal requires the approval of Great Wall Pan Asia shareholders.

Ou Peng, chairman of Great Wall Pan Asia, said the deal was to “generate favourable investment returns to the shareholders.”

The company has four investment properties in Hong Kong at present, Ou said in the exchange filing.

“With the considerable size and the diversified nature and geographical locations of the properties under the portfolio assets, the board considers that the indirect investment in the portfolio assets through the joint venture group allows the group to gain an immediate and sizeable retail presence as well as to improve its existing position within the property industry in Hong Kong,” Ou said.

Ou also said the transaction would enhance the company’s international reputation and experience in fund management.

The joint venture will have a board comprising not more than seven directors. Great Wall Pan Asia can appoint two of these directors.

Under the agreement, Great Wall Pan Asia Property has the option to purchase interests in one of the assets in the portfolio at the exercise price within 18 months after the purchase.

The selected asset under this option comprises a shopping centre and a car park but the company did not identify which properties were involved.

Related to the option, Great Wall Pan Asia has agreed to provide an interest-free advance to the joint venture of an amount not exceeding HK$743 million.

Great Wall Pan Asia was formerly known as Armada Holdings. Armada was renamed from the SCMP Group and sold to China Great Wall for HK$1.57 billion in August last year after Kerry Media sold the Post to Alibaba Group Holding.