(Yicai) Nov. 26 -- Joy City Property will delist from the Hong Kong Stock Exchange tomorrow after its controlling shareholder Grandjoy Holdings Group repurchased and cancelled shares held by other investors through a private agreement, the commercial real estate arm of Chinese state-owned food processing giant Cofco Group said today.

Joy City, which went public on the Hong Kong bourse in 2013, will delist at the close of trading on Nov. 27, the Hong Kong-based company said. Joy City said at the end of July that Grandjoy Holdings, which is another Cofco unit and owns 64 percent of Joy City, would spend around HKD2.9 billion (USD372.8 million) in a share buyback scheme. Once the privatization is completed, Grandjoy Holdings will hold nearly 100 percent of Joy City.

Due to the cyclical nature of the real estate industry, Joy City’s market performance has fluctuated in recent years, putting pressure on liquidity, Shenzhen-based Grandjoy Holdings said. The privatization is a strategic move to proactively adapt to market changes, streamline corporate governance and consolidate its organizational and ownership structure. After the deal is closed, Grandjoy Holdings will increase its equity in Joy City, boosting the net profit attributable to the parent company.

In 2019, the Cofco real estate platform underwent a major restructuring. Grandjoy Holdings, which is listed on the mainland, acquired a 64 percent stake in Joy City through a share issuance, giving Beijing-based Cofco a presence on both the mainland and Hong Kong markets. After this privatization, Cofco’s real estate platform will only include Grandjoy Holdings.

Joy City, whose main business is the development, operation, and management of urban complexes under the “Joy City” brand, logged net profit of CNY800 million (USD113 million) last year on revenue of CNY19.8 billion (USD2.8 billion). The firm had total assets of CNY106.8 billion and liabilities of CNY73.6 billion.

Editor: Kim Taylor