China Development Bank to Take 40% Stake in Developer New Town

China Development Bank International Holdings Ltd. agreed to buy 40 percent of China New Town Development Co. (1278), a land infrastructure developer.

The unit of the world’s largest policy lender signed a non- binding agreement to subscribe for 3 billion shares in the company at 24.6 Hong Kong cents each, China New Town Development said in a statement to the Hong Kong stock exchange today. The stake of controlling shareholder SRE Investment Holding Ltd. will fall to 20 percent from 33 percent, according to the statement.

China Development Bank International could make the company more competitive by combining the bank’s financial background and network with China New Town’s experience and management team, the statement said.

The stock, which also trades in Singapore, was listed in Hong Kong in October 2010. The shares fell 2.5 percent to 79 Hong Kong cents today.

To contact the reporters on this story: Kana Nishizawa in Hong Kong at knishizawa5@bloomberg.net; Sandi Liu in Hong Kong at sliu60@bloomberg.net

To contact the editor responsible for this story: Nathaniel Espino at nespino@bloomberg.net