Developer China South City Sells 70% Stake in Xian Projects for $717 Million, Reports Reuters

HONG KONG – China South City Holdings Limited, a prominent Chinese logistics and commercial developer, has announced an agreement to sell nearly 70% of its stake in a venture managing projects in the central city of Xi’an to a state-owned entity for 5 billion yuan (approximately $717 million).

In a recent filing, the company indicated that it expects to realize a gain of HK$8 million (around $1.03 million) from the transaction. The funds generated from this sale will be allocated for working capital and for the repayment of 2.86 billion yuan in loans provided by shareholders to the business entity, China South City Xi’an.

The company stated that this transaction will enhance the liquidity of China South City Xi’an, offer additional working capital to the group, and lower its gearing ratio.

The buyer is associated with a unit that is linked to the company’s major shareholder, SZCDG, which is under the ownership of the Shenzhen municipal government.

China South City Xi’an boasts property developments with a completed gross floor area of 2.41 million square meters and a planned gross floor area of 760,000 square meters.

Post-transaction, the ownership of the business will be divided with 69.35% held by the buyer and 30.65% retained by China South City. Additionally, the buyer will have the option to sell back either all or part of its shares in the Xi’an entity to China South City in the future.