Shui On Land has sold its majority interest in the Taipingqiao commercial development to China Life Trustees to finance existing projects. The developer yesterday announced it agreed to sell a 99 per cent interest in Shanghai Xing Qiao, which owns a 99 per cent stake in the Taipingqiao development site, for more than 3.32 billion yuan (HK$4.21 billion). The company is expected to generate a gain of 192 million yuan from the disposal. Shanghai Xintiandi, a subsidiary of Shui On Land, will provide management services such as administration services, leasing and financial management services to the project. They will receive a monthly management fee equivalent to 0.03 per cent of the fair market value of the site. The management fee is estimated to be about 15 million for 2014. According to the sale agreement, Shui On's subsidiary, Taipingqiao Holdings, has the right to buy back the shares and the inter-company loan within seven years after the transaction is completed. Shui On believes the disposal will improve the cash position of the group and strengthen the consolidated balance sheet of the company. Part of the proceeds will be used for developing existing projects. Taipingqiao Holdings and China Xintiandi Holding will use part of the proceeds to enhance its current portfolio and seek market opportunities. The Taipingqiao project is being built in Shanghai's Huangpu district. It is a commercial, office and retail project. It offers a leasable and saleable gross floor area of about 79,000 square metres. The project is scheduled for completion by 2014. It is the second disposal by Shui On Land in recent weeks. Last Friday, the developer sold an office building and car parking spaces at Chongqing Tiandi in Chongqing to Sunshine Life Insurance for more than 2.41 billion yuan. "Shui On Land is under greater refinancing pressure compared with the other mainland developers as the company has an outstanding debt of about US$20 billion it has to settle in the coming 18 months," said an analyst who asked not to be named. "It includes about US$10 billion of dim sum bonds." The company's net gearing was about 70 per cent at the end of last year. Shares of Shui On Land climbed 1.62 per cent to close at HK$2.51 yesterday.