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Fortune Spring Ventures to sell stake in SPV for $267.89 million
Shimao Group Holdings, a Chinese developer, announced on Friday that its unit Fortune Spring Ventures would sell its stake in three special purpose vehicles for $267.89 million. The agreement comes as Chinese developers, led by Evergrande and Kaisa Group, struggle with liquidity shortages as a result of new regulations. Shimao said its unit would sell 22.5% of each of Asia Bright Development, Star Galaxy, and Grand Victoria Finance's issued share capital. The three special purpose vehicles are in charge of managing and developing a property development project in Hong Kong's South West Kowloon district. It also said that the stake sale would provide additional working capital and improve cash flow for the company, while also indicating that the disposal could result in a loss of about HK $770 million. Rating agencies Moody's and Fitch downgraded Shimao by two notches due to the company's increased financing risks. Worries about an asset sale and cancelled apartment deals caused sharp drops in the company's stock and debt earlier this week. On July 5, 2006, Shimao Group Holdings Limited was listed on The Stock Exchange of Hong Kong Limited's mainboard. The Group focuses on large-scale, high-quality, integrated real estate projects in China, with a particular emphasis on cities with strong, dynamic economic growth potential. The development of residential, hotel, office and commercial properties is a priority for the Group. Image Source