Franshion Properties to Raise $564 Million From Share Placement

Franshion Properties China Ltd., the developer controlled by Sinochem Corp., will raise HK$4.37 billion ($564 million) selling shares to investors including Singapore’s sovereign fund.

The company will sell 1.6 billion shares at HK$2.73 apiece, a 9.9 percent discount to the last close, according to a Hong Kong exchange filing on Tuesday. New China Life Insurance Co. will buy 1.01 billion shares and become Franshion’s second-largest shareholder with a 9.5 percent stake.

Franshion is raising funds as the Chinese real-estate market starts to recover and the nation’s stock market surges to a seven-year high. The offering adds to the $27 billion of share sales announced by developers in greater China this year, data compiled by Bloomberg show.

Walter Kwok, the former chairman of Hong Kong developer Sun Hung Kai Properties Ltd., and U.S. private-equity firm Warburg Pincus are also buying shares in the placement. Franshion will use the proceeds for potential investments and debt financing, according to the filing.

Singapore sovereign fund GIC Pte’s stake in Franshion will increase to 6.5 percent after the sale, from 3 percent, while Sinochem’s holding will be diluted to 54 percent. Morgan Stanley, CCB International Holdings Ltd. and HSBC Holdings Plc are arranging the sale.

Franshion shares will resume trading on Wednesday.

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