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(Yicai Global) Sept. 14 -- Real estate firm China Merchants Shekou Industrial Zone Holdings has refused to sell CNY3.5 billion (USD512 million) worth of shares to Ping An Insurance as it has found another way to fund its purchase of industrial park developer Nanyou Group Holdings.
The property firm has called off the plan to issue new equity for the banking and insurance giant due to changes in the market environment, Shenzhen-based CMSK said in a statement yesterday. Shenzhen-headquartered Ping An Insurance would have become the company's fifth-largest shareholder.
CMSK will issue shares directly to seller Shenzhen Investment Holdings to acquire Nanyou that partly owns southeastern China's Qianhai Bay Free Trade Port Zone as this should make the whole process faster, an insider at CMSK told Yicai Global.
In late May, CMSK said that it would sell shares, convertible bonds, and pay partly in cash to finance its CNY7-billion purchase of a 24 percent stake in Nanyou to gain full ownership in the warehousing and industrial park operator. That should strengthen its portfolio of assets in Qianhai.
The scrapped deal should not affect the cooperation between Ping An Insurance and CMSK, said the insider. The pair expects to maintain partnership in developing Qianhai, the person added.
After the new deal, Shenzhen Investment Holdings could become CMSK's second-largest shareholder if it converted its bonds into equity.
CMSK's shares [SHE: 001979] fell 0.8 percent to CNY15.92 (USD2.30) this afternoon.
Editor: Emmi Laine