SHANGHAI: The billionaire owner of Country Garden Holdings Co is selling a stake in a unit to raise about US$650mil (RM2.86bil) amid a flurry of share sales by cash-strapped Chinese developers.
Yang Huiyan agreed to sell 237 million shares of Country Garden Services at HK$21.33 (RM12), according to a statement to the Hong Kong stock exchange. That represents a 10.9% discount to the latest closing price.
Shares of both companies dropped, along with those of Seazen Group Ltd, which separately announced an equity offering.
Yang is co-chairperson of Country Garden Holdings Co, the real estate giant founded by her father, and chairperson of its property management spinoff Country Garden Services.
Bloomberg reported Country Garden’s sale plans last week. The 41-year-old has an estimated net worth of US$12.1bil (RM53.3bil).
Country Garden has tapped the Hong Kong equity market twice in the past month, raising more than US$1bil (RM4.4bil) to shore up finances that have been hurt by an unprecedented housing slump.
Chinese developer shares have soared in recent weeks as authorities unwind a clampdown on leverage by encouraging fundraising through bond and stock sales as well as bank loans.
“The share sale of Country Garden Services will boost bond investor sentiment,” said Daniel Fan, senior credit analyst at Bloomberg Intelligence.
“The chairperson could lend part of the proceeds to the holding company for debt servicing, or she could use it to buy back bonds in the secondary market,” Fan pointed out.
Some of Country Garden’s dollar bonds were indicated as much as one US cent higher yesterday, according to Bloomberg.
Shares of Country Garden declined as much as 6.5% in Hong Kong before paring the bulk of the losses.
Meanwhile, Country Garden Services slumped as much as 18%, the most since July.
Seazen Group lost as much as 13%. The developer agreed to sell shares to raise HK$1.96bil (US$252mil or RM1.1bil) in a placement.
It will provide funding to repay offshore debts and be used as general working capital.
A Bloomberg Intelligence gauge of Chinese developers has climbed about 84% since the end of October as the government’s efforts to rescue the property market mounted.
Meanwhile, CIFI Holdings Group Co announced plans to sell a stake in a unit to create liquidity and reduce leverage.
According to a filing yesterday, the group invited potential bidders to buy shares of its CIFI Ever Sunshine Services Group and began preliminary bidding discussions.
CIFI defaulted on a convertible bond in October and has since suspended offshore financing payments, highlighting the deepening stress in the property sector.
The company plans to present a holistic solution to its creditors and other stakeholders no later than the first quarter of 2023, it said.
As well as in Hong Kong, equity fund raising has picked up in mainland China after the government last month ended a ban on listed companies selling more shares at home.
Some 17 listed Chinese property developers or firms with real estate businesses announced plans to raise more equity funds, the Financial News reported last week.
Agile Group Holdings Ltd, which develops villa apartments and high-rise homes set amid landscaped gardens, tapped the secondary market in Hong Kong last month, raising just over US$100mil (RM440mil).
Last week, Agile Group Holdings amassed another US$63.5mil (RM279mil) through the sale of units in A-Living Smart City Services. — Bloomberg
