(Yicai Global) Sept. 29 -- Shares of China Resources Mixc Lifestyle Services fell after the state-backed property manager said it plans to spend CNY10.4 billion (USD1.4 billion) buying property management assets from cash-strapped developer Shinsun Holdings Group.
After dropping by as much as 6.5 percent at the open, CR Mixc [HKG: 1209] ended today 4.2 percent down at HKD29.50 (USD3.76), while Shinsun [HKG: 2599] sank 6.6 percent to 28 Hong Kong cents (4 US cents).
Super Honour Development, a unit of China Resources Mixc, will acquire Zhuji Xiangsheng and its transferred payables from that firm’s parent company Shinsun Lifestyle Services Hong Kong, a Shinsun affiliate, the Hong Kong-based buyer said yesterday. China Resources Mixc will also buy a 2 percent stake in Zhejiang Shinsun from Goldenfinger Hong Kong, another Shinsun affiliate.
After deducting the CNY206 million (USD28.6 million) of payables from the final cost, China Resources Mixc will pay no more than CNY830 million in cash, it said.
The acquisition is not the company’s first big buy this year. In January, China Resources Mixc announced plans to purchase Yuzhou Property Service for CNY1.1 billion (USD153 million) and Changle for up to CNY2.3 billion to effectively control Zhongnan Group. The cost of the Changle deal rose to CNY2.5 billion in April.
The latest acquisition will boost the management strength of China Resources Mixc and its units in Zhejiang, Anhui, and Jiangsu provinces, as well as increase their market influence, the firm said. Once the transactions are completed, the targets will become indirectly wholly-owned units.
Shanghai-based Shinsun defaulted on a USD200 million bond due on June 7, it said in a filing the same day. On Sept. 22, the firm was notified that Shenwan Hongyuan Strategic Investments HK had filed a petition with the Grand Court of the Cayman Islands to wind up Shinsun over about USD50 million in unpaid financial liabilities.
Editor: Futura Costaglione