Greenland Holding Group Co., the Shanghai city government-owned builder of one of China’s tallest towers, plans to list on the Shanghai Stock Exchange through an asset swap with an affiliate.
Greenland will inject assets worth 65.5 billion yuan ($10.6 billion) into Shanghai Jinfeng Investment Co. in exchange for 11.3 billion new Jinfeng shares at 5.64 yuan each, Jinfeng said in a statement to the city’s stock exchange yesterday.
“After the entire listing, Greenland may use the capital market as a platform to improve overall competitiveness and boost profitability,” Jinfeng said in the statement.
Greenland’s back-door listing comes as it seeks investment opportunities abroad and as Shanghai steps up efforts to make its state-owned enterprises more profitable and efficient. Chinese developers are virtually denied access to financing through initial public offerings amid a government crackdown on rising home prices, according to Wu Kan, a fund manager at Dragon Life Insurance Co. in Shanghai.
Greenland, which entered the U.S. and Australia last year, is joining Chinese developers including China Vanke Co. that are venturing into real estate abroad as they seek opportunities to diversify outside their home market. Dalian Wanda Group said in June it will build a luxury hotel and apartment building on the South Bank of the River Thames in London.
Greenland said in January it plans to invest 1.2 billion pounds ($2 billion) on two property projects in London as Chinese developers branch out overseas. Greenland, set up in 1992 and owned by the Assets Supervision and Administration Commission of Shanghai Municipal Government, is also looking to enter Canada, France and Singapore this year, it said then.
The asset swap is pending the approval of shareholders and the China Securities Regulatory Commission, Jinfeng said yesterday. Both Greenland and Jinfeng are controlled by state-owned Shanghai Real Estate Group Co.
Shares of Shanghai Jinfeng will resume trading today after being suspended since Aug. 26, according to the statement.
Greenland’s announcement comes as Zhejiang Xingrun Real Estate Co., a closely held developer based in Fenghua in eastern China, collapses with 3.5 billion yuan of debt, with the majority shareholder and his son being detained by police, according to reports yesterday.
— With assistance by Shidong Zhang