Glorious Property Halts Trading on Possible PrivatizationBloomberg News
Glorious Property Holdings Ltd., the Chinese developer owned by billionaire Zhang Zhirong, suspended share trading in Hong Kong citing a possible privatization plan.
Glorious shares were halted from 9 a.m. Hong Kong time pending the release of a possible privatization proposal by the controlling shareholder, according to a statement to the stock exchange from the Hong Kong-based developer. The stock rose 6.9 percent to HK$1.24 on Oct. 18.
Glorious has recorded slowing property sales this year, while sales plunged and new orders declined at the shipping company controlled by Zhang, according to the companies. The possible privatization was unexpected because Glorious never talked about such plans, according to Chen Duo, a Hong Kong-based property analyst at Credit Suisse Group AG and Hugo Hou, an analyst at Haitong International Securities Co.
“The plan will be good news for shareholders if they actually manage to get it done,” said Chen, who estimates the deal will require about HK$3 billion ($387 million). “It remains uncertain as to where the funding would come from as Zhang’s shipping and property businesses are both not doing well this year.”
Zhang, the founder and biggest shareholder in Glorious and China Rongsheng Heavy Industries Group Holdings Ltd., quit from the boards of the two companies in November after another company he controlled agreed to pay $14 million to resolve U.S. insider-trading claims. His departure is unrelated to that matter, iPR Ogilvy in Hong Kong, which handles his public relations, said in an e-mailed reply to questions from Bloomberg News.
Glorious shares have fallen 15 percent this year, compared with a 3.6 percent gain in the benchmark Hang Seng Index.
Two phone calls to Glorious spokeswoman Doris Chung were not answered.
Sales of Zhang’s shipping company Rongsheng plunged 71 percent in the first half of the year and the cash and cash equivalents decreased by 1.27 billion yuan to 871 million yuan as of the end of June, the company said.
Zhang has shares worth $1.23 billion, according to the Bloomberg Billionaires Index. He owns 40.7 percent of Rongsheng and 68.4 percent of Glorious, according to filings to Hong Kong Stock Exchange.
— With assistance by Bonnie Cao