Sunac China Agrees to Pay 2.37 Billion Yuan for Kaisa CompaniesAlex Davis
Sunac China Holdings Ltd. has agreed to buy four units of troubled property developer Kaisa Group Holdings Ltd. for 2.37 billion yuan ($380 million).
Sunac will pay 1.18 billion yuan for Shanghai Qingwan, 606.6 million yuan for Shanghai Rongwan and 598.6 million for Shanghai Yingwan and Shanghai Chengwan combined, the company said in a Sunday filing with the Hong Kong stock exchange. Kaisa announced it would post a loss of 43.9 million yuan after the disposals in a separate filing with the Hong Kong exchange.
The acquisitions will strengthen Sunac’s “leading position in the Shanghai property market,” the company said in the filing.
The Shenzhen government has been seeking investors for Kaisa after it missed a bond payment due Jan. 8. Kaisa would become the first Chinese developer to default on a dollar bond if it doesn’t pay the missed $23 million coupon when a 30-day grace period expires.
Kaisa’s troubles first surfaced in December when local authorities restricted sales of some of its properties, prompting concern among investors of political risks associated with Chinese developers. Kaisa is being investigated over alleged links to a senior official in the city, people familiar with the matter said this month.
Sunac suspended trading of its shares in Hong Kong on Friday pending an announcement. The stock has declined 12 percent this year, compared with a 3.8 percent advance for the Hang Seng Index. Kaisa shares have been suspended since Dec. 29.