Sherman Kwek, group CEO of CDL, says: “This deal is still pending several conditions precedent. One of the major shareholders is Greenland [Hong Kong Holdings], with a 40% stake. Greenland’s stake will be pared down to below 20% because it involves Mr Wu’s buying a stake from Greenland.”
SINGAPORE (May 20): On May 15, City Developments announced it had entered into agreements to invest in a 24% equity stake in Sincere Property Group, a stressed mainland Chinese developer, for RMB5.5 billion ($1.1 billion). The transaction is subject to approvals and other conditions, and expected to be fully completed in 4QFY2019. This investment will make CDL the largest investor after Sincere’s founder and chairman, Wu Xu. CDL will have board representation and the right to key decision-making.
The investment amount of RMB5.5 billion will comprise a share subscription and a four-year interest-bearing loan, the allocation of which is subject to adjustments. The debt-and-equity split is not disclosed. As at March 31, CDL had extended RMB526 million in loans to Sincere. These loans boosted CDL’s interest income by 60.9% y-o-y to $21.89 million in 1QFY2019.
