CDL Raises Its Stake In Shenzhen Tech Park
CHINA – City Developments Limited (CDL) is divesting its stake in Sincere Property Group for a nominal sum of US$1, closing and writing off its troubled investment in the cash-strapped Chinese firm. At the same time, the Singapore-based property developer has increased its stake in a business park in Shenzhen, China, reported Mingtiandi on Saturday (11 September).
Notably, CDL is unloading its 63.75 percent stake in a firm known as HCP Chongqing Property Development, which holds an 80.01 percent interest in Sincere. This translates to a 51 percent stake in Chongqing-based Sincere.
The acquirer is Sure Spread, an unrelated third party incorporated in Seychelles, but headquartered in Hong Kong. The buyer is reportedly owned by government-owned company Jiangxi Copper.
“The consideration for the sale shares was agreed upon, taking into account the value of the said shares, as well as the current liquidity issues and potential bankruptcy reorganisation of Sincere,” stated CDL in a filing with Singapore’s bourse (SGX) that was published last week.
For FY2020, CDL had recorded a S$1.78 billion impairment due to losses attributable to Sincere Property Group, leading to a 93 percent write down of the Singapore developer’s overall investment in Sincere. In addition, a bankruptcy claim has been filed against the Chinese developer, which has also missed payment on a bond.
In a bid to reclaim some of the cash lent to Sincere in 2020, CDL has also agreed to take over the former’s remaining 15.4 percent stake in a holding firm that partially owns Shenzhen Tusincere Technology Park, a partially completed mixed-use development in Longgang district in Shenzhen. This is because that interest has been committed by Sincere as collateral for an earlier loan granted by CDL.
Situated in Universiade New Town close to Shenzhen Universiade Sports Centre, the business park has an overall saleable gross floor area (GFA) of 413,634 sq m (4.45 million sq ft), in addition to a 162,144 sq m self-held office building.
In particular, 70 percent of tech park’s 192,739 land plot is intended for office space, while 10 percent and 20 percent are allocated for retail use and apartments.
Upon completion of the transaction, CDL will increase its stake in Shenzhen Longgang Tusincere Tech Park to 65 percent, while Longgang district government will control the remaining 35 percent.