Chinese developers line up to tap equity financing after regulators lift ban on share sales
- Hubei Fuxing, Shimao Group, Xinjiang Beixin and Xiamen C&D have released their share placement plans
- China’s markets watchdog announced a five-point policy on Monday, which included lifting a six-year ban on equity financing, to address the sector’s liquidity issues
Hubei Fuxing Technology, Shimao Group and Xinjiang Beixin Road & Bridge, which have been reported to have some liquidity problems, released their share placement plans late on Tuesday. Xiamen C&D announced its plan on Wednesday.
The move comes after the China Securities Regulatory Commission (CSRC) announced a five-point policy late on Monday to address the liquidity issues of indebted Chinese developers. The measures, which also include mergers and acquisitions, restructuring and private share placements, apply to companies listed on mainland Chinese markets and in Hong Kong.
Chinese authorities had introduced refinancing rules for listed property firms in 2006, but suspended these in 2009 to prevent the market from overheating. The suspension was again lifted in 2013 before being reimposed in 2016.
Hubei Fuxing Technology said in a statement that it aims to raise funds from a private placement of 30 per cent of its share capital to no more than 35 investors. The proceeds will be used to improve capital structure, ease liquidity and stabilise its finances.
Shanghai-based Shimao Group said it plans to raise funds with a share sale not exceeding 30 per cent of its current capital base. The company has a market value of about 10.2 billion yuan (US$1.44 billion).