bodyType

customContents

entityId

entityUuid

articlePageQuery

filter

article

articleBaseAdvertisingInfoArticle

articleListArticle

articleSeoArticle

hooksArticleAcknowledgementGateOverlayArticle

hooksTrackPageViewArticle

hooksContentInterestArticle

articleLinkingDataContent

hooksAmpRedirectArticle

articleSchemaContent

liveArticle

advertZone

sentiment

contentLock

topics

types

sections

paywallTypes

createdDate

publishedDate

urlAlias

moreOnThisArticles

sponsorType

commentCount

authorLocations

authors

corrections

displaySlideShow

multimediaEmbed

printHeadline

seriesContainer

articleSpeeches

socialHeadline

headline

images

flag

firstTopic

glossary

flattenTypeIds

image

relatedLinks

relatedNewsletters

__typename

sponsor

pdfFiles

seriesReverseOrder

series

disableOffPlatformContent

published

updatedDate

summary

subHeadline

body

keywords

readingTime

customTimezone

liveContents

Xie Yu

Zheng Yangpeng

Troubled conglomerate China Minsheng Investment Group sold its remaining stake in a prime plot of land in Shanghai at a discount, after a bond default drew attention to the company’s liquidity shortfall.
The firm made full payment to its creditors after the deal, sources said.
CIMG sold its 50 per cent stake in the central Shanghai site known as Dongjiadu, on the west bank of the Huangpu River, to Greenland Holdings for 12 billion yuan (US$1.8 billion).
The unit will also acquire Minsheng’s loans to the property company, according to a Greenland statement filed with the Shanghai stock exchange Thursday.
The transaction requires regulatory approval.
“The acquisition will help Greenland increase high-quality land reserves in first-tier cities and enhance its comprehensive competitiveness in the real estate industry,” the statement said.
“Greenland will take full advantages of development capacity, industrial resources and regional layout and make full efforts to build a new landmark in Shanghai as an international finance centre,” said Greenland chairman Zhang Yuliang.
The deal was completed at a 20 per cent discount to the asking price issued by CIMG in late January, representing a savings of 3 billion yuan, according to a source from Greenland.
Greenland is a large property developer controlled by the Shanghai government.
Minsheng, backed by investment from 59 leading private enterprises, made the discounted land sale after it missed payment of a 3 billion yuan bond on January 27. The company was forced to suspend taking bids for three bonds it listed on the Shanghai Stock Exchange on Tuesday.
One of the three bonds had plunged by more than 27 per cent on Monday, as investors worried over the firm’s financial state.
The Shanghai land was bought by a unit of Minsheng for nearly 25 ­billion yuan in November 2014, in a record land transaction in terms of price at the time.
Minsheng later transferred part of the stake to other parties for an undisclosed sum, retaining a 50 per cent holding.
However, Minsheng still faces more than 10 billion yuan in payments for maturing debt and interest this year, according to data provider Wind.
The company is suffering from financial strain caused by aggressive mergers and acquisitions in earlier years, which failed to generate sufficient cash flow.
However, for state-owned Greenland, the deal is a bargain.
“To acquire such a project in such a prime location in Shanghai with such a price is definitely a good deal [for Greenland]. This is a very promising district. After CMIG bought the plot Shanghai went through a big surge in house prices In 2015 to16,” said Lu Wenxi, Centaline’s senior research manager in Shanghai.
Zhang Hongwei, the research director of Shanghai-based property consultancy TopSur, said Greenland has similar mixed-use projects in nearby Dongjiadu, and would benefit from its experience.
Zhang added that Greenland would enjoy benefits in developing the project as a state-owned enterprise linked to the Shanghai municipality.
However, the size of the site also meant there would be considerable risk.
“Greenland has to add more money in further development of the plot and that will put strain on the developer’s cash flow,” said Zhang. “The ideal disposal would be to sell it wholly to other investors.”
Additional reporting by Daniel Ren


Greater Bay Area assets poised to lead surge in China’s expanding C-REIT market

Beijing municipality eases home purchase curbs to shore up sluggish market

China Jinmao sells 5-star Ritz-Carlton hotel in Hainan’s Sanya for US$322 million

A tale of two markets: Hong Kong property prices stabilise as mainland China slump drags on

China property

Minsheng sells Shanghai land stake at big discount after bond default

Pedestrians walk along the bund as skyscrapers of the Pudong Lujiazui Financial District stand across the Huangpu River in Shanghai on December 28, 2018. Photo: Bloomberg

Business

Companies

Banking & Finance

Property

Hong Kong & China

Minsheng sells holding in central Shanghai land site for US$1.8 billion, using the funds to pay off creditors
Minsheng agrees to 20 per cent discount to its asking price issued late January


Minsheng sells holding in central Shanghai land site for US$1.8 billion, using the funds to pay off creditors


Minsheng sells Shanghai land stake at big discount after bond default

.css-1mniedq{color:inherit;font-weight:inherit;font-size:inherit;font-family:inherit;line-height:inherit;}Minsheng sells holding in central Shanghai land site for US$1.8 billion, using the funds to pay off creditors Minsheng agrees to 20 per cent discount to its asking price issued late January

Minsheng sells holding in central Shanghai land site for US$1.8 billion, using the funds to pay off creditors

Minsheng agrees to 20 per cent discount to its asking price issued late January