(Yicai Global) Aug. 6 -- The government of Beijing's Chaoyang district has taken control of Orient Landscape & Environment, one of China's largest landscape architecture companies, through a recent purchase of an additional 5 percent of the debt-ridden firm for CNY792 million (USD113 million).
The move gives the capital's largest central district a 10 percent stake in Orient Landscape with 26.8 percent of its voting rights, leaving founders He Qiaonv and her husband Tang Kai with 39.1 percent of equity and 22.3 percent of voting rights, according to a statement released by Orient Landscape today.
Beijing Chaoyang State-Owned Capital Operation Management Center will buy the stake through its unit Beijing Chaohuixin Enterprise Management. The transfer will help enhance the Beijing-based firm's corporate credit and project financing capabilities, but will not lead to major management changes, the statement added.
Founded in 1992, Orient Landscape was once China's leading private landscaping firm. It has been in debt meltdown since the second half of last year and has been the subject of multiple scandals over defaults on wages and payments to suppliers.
Shares in the gardening contractor [SHE:002310] closed 2.9 percent higher at CNY6.07 (86 US cents) each, after gaining over 4 percent earlier in the day.
Founder He Qiaonv also sold 5 percent of Orient Landscape to Chaoyang's state-owned asset manager last December through its subsidiary Beijing Yingrun Huimin Fund Management Center for CNY1 billion (USD142 million). Yingrun Huimin also bought CNY400 million of bonds issued by Orient Landscape this February.