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State Capital Increased Stake in Developers

China's second biggest property developer Evergrande is selling its entire 14.7% stake in China's biggest home builder China Vanke's A-share at RMB18.80 per share, for aggregate consideration of approximately RMB29.2 billion. China Evergrande said it plans to use the proceeds from the disposal for repayment of debts of the company.

Evergrande acquired China Vanke's A Shares in 2016 for an aggregate consideration of approximately RMB36.27 billion, the HK- listed developer said as a result of the disposal "expected loss of approximately RMB7.07 billion" will occur for this transaction.

The developer said the purchaser Metro Shenzhen will pay the initial share transfer price of approximately 65.5% of the share transfer price (approximately RMB19.1billion) before 16 June 2017, with the balance to be paid before 28 June 2017. Upon the full payment of the share transfer price by the purchaser, the parties shall procure the transfer and registration of the relevant shares.

China Evergrande on March 19 issued USD500 million 7.0% senior notes due 2020 and USD1 billion 8.25% senior notes due 2022. On March 24, China Evergrande proposed another USD senior notes due 2024 up to USD1 billion with IR of 9.50% per annum. Earlier in June, the company said it had completed "capital increase" of RMB70billion from two rounds of investments and it would help reduce the debt ratio.

- APMR News

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