Evergrandes $130 billion bid for state-owned assets in Guangzhou and Shenzhen has reached more than 30 billion yuan

category:Finance
 Evergrandes $130 billion bid for state-owned assets in Guangzhou and Shenzhen has reached more than 30 billion yuan


On the evening of the same day, China Evergrande also announced that among the 130 billion yuan strategic investors of Evergrande real estate, 125.7 billion yuan of strategic investors had signed a supplementary agreement to convert into common shares, of which 86.3 billion yuan of strategic investors had signed an agreement to continue holding; and 39.4 billion yuan of strategic investors had signed a supplementary agreement. Among them, the total amount received by state-owned enterprises in Shenzhen and Guangzhou exceeded 30 billion yuan.

Equity transfer of Shandong Expressway 5 billion yuan

Shandong Expressway received the notice from Changying Jincheng on November 20. With the approval of Changying Jincheng investment decision-making committee, Changying Jincheng signed the equity transfer agreement and equity pledge contract of Evergrande Real Estate Group Co., Ltd. with Shenzhen talent Anju group and Evergrande real estate. Shenzhen talent and Anju group transferred 1.1759% equity of Evergrande real estate held by Changying Jincheng for 5 billion yuan.

Shandong Expressway shares in Evergrande real estate can be traced back to three years ago. In October 2017, the board of directors of Shandong Expressway made a resolution to approve the company and Shandong Expressway Changying Equity Investment Management Co., Ltd. (hereinafter referred to as Changying company) to initiate the establishment of industrial investment fund Changying Jincheng. Shandong Expressway contributed no more than 5.010 billion yuan as LP, and Changying company invested 10000 yuan as GP.

Subsequently, in November 2017, Changying Jincheng investment decision-making committee agreed to invest in Evergrande real estate project. Changying Jincheng signed capital increase agreement and supplementary agreement on Evergrande Real Estate Group Co., Ltd. with Guangzhou Kailong Real Estate Co., Ltd., Evergrande real estate and Xu Jiayin. Changying Jincheng invested 5 billion yuan and subscribed to the new capital of Evergrande real estate.

In the announcement of the sale of Evergrande real estate equity, Shandong Expressway said that Shenzhen talent and Housing Group will pay equity transfer funds in three times, namely 1.5 billion yuan, 1.5 billion yuan and 2 billion yuan, respectively, within 12 months after the signing of the agreement. Among them, 1.5 billion yuan has been paid on November 20, 2020, 1.5 billion yuan will be paid within 6 months after signing the agreement, and 2 billion yuan will be paid within 12 months after signing the agreement.

The reporter of the Securities Times noted that from the date of signing the relevant agreement to the actual payment date within the above payment period, the interest of the second and third equity transfer funds of 3.5 billion yuan is calculated according to the one-year loan market quotation rate of 3.85% per year published by the national interbank lending center on October 20, 2020. If the payment is made in advance, the interest rate will fluctuate according to the situation.

Meanwhile, Changying Jincheng will handle the industrial and commercial transfer procedures within 15 working days after receiving the initial equity transfer payment. From the equity transfer to the completion of the transfer payment, 1.1759% of the equity of Evergrande real estate will be pledged to Changying Jincheng.

Support of state owned assets in Shenzhen and Guangzhou

The reporter noted that at the beginning of this month, Evergrande and Shenzhen real estate announced the termination of the loan case of Evergrande real estate, and there was still a little suspense in the announcement of Evergrande at that time.

Specifically, China Evergrande announced that among the 130 billion yuan of strategic investors, 86.3 billion yuan of strategic investors had previously signed a supplementary agreement, agreeing not to require repurchase and continue to hold the rights and interests of Evergrande real estate; the 35.7 billion yuan strategic investors have also completed the negotiation and will soon sign the supplementary agreement; the 5 billion yuan strategic investors are negotiating due to the asset restructuring involving their own major shareholders; and The company has paid the principal of the remaining 3 billion yuan of strategic investors and is about to buy back.

The reporter noted that on the evening of November 22, China Evergrande also issued an announcement on this matter. Among the 130 billion yuan strategic investors of Evergrande real estate, 125.7 billion yuan of strategic investors have signed a supplementary agreement to convert into common shares, of which 86.3 billion yuan of strategic investors have signed agreements to continue holding, and 39.4 billion yuan of strategic investors have signed a supplementary agreement.

China Evergrande also disclosed that in the above 39.4 billion yuan signed supplementary agreement, 20 billion yuan of equity was held by Shenzhen talent Anju group, 10 billion yuan of equity was held by Guangzhou Urban Investment Investment Co., Ltd., and another 9.4 billion yuan of equity was continued to be held by Shenzhen group and other original strategic investors; the remaining 4.3 billion yuan of strategic investors principal has been repurchased after being paid by Evergrande cash.

It is worth mentioning the background of Shenzhen talent and comfortable housing group. According to Tianyan data, the company is a platform focusing on investment and financing of talent housing, construction and acquisition platform for talent housing, policy oriented talent housing supply platform, and policy oriented, professional and large-scale housing rental platform. In terms of equity structure, it is wholly owned by the state owned assets supervision and Administration Commission of Shenzhen Shares.

In addition, there are also Guangzhou City Investment Investment Co., Ltd., which represents the state-owned assets of Guangzhou. Analysts believe that the large-scale investment of two state-owned enterprises means that Evergrande is expected to carry out in-depth cooperation with them in the investment, construction and operation of talent housing, urban infrastructure construction and operation, etc., which will bring new growth points for performance and help Evergrande achieve more stable development.

Evergrande property IPO is imminent

The reporter noted that recently, Evergrande has introduced about HK $31.8 billion equity investment in real estate, automobile, property and other business sectors. At the same time, Evergrande auto has launched IPO guidance on the science and technology innovation board, and Evergrande property has passed the hearing and will be listed soon. Industry insiders believe that all these will increase Evergrandes net assets and push down the debt ratio substantially.

In fact, on November 22, Evergrande property held a listing promotion meeting in the form of live media network video. The live page showed that the stock code of Evergrande property was 6666. HK.

Hu Liang, executive director and general manager of Evergrande property, said at the listing promotion meeting that the company operates independently as a subsidiary of Evergrande group, and the proportion of revenue from independent third parties was 55.8% in 2017 and increased to 64.1% in March 2020. The income structure is constantly optimized.

Hu Liang disclosed that the company officially established an investment development team in June this year, and completed the acquisition of five regional independent third-party property companies from June to September this year, with a total area of 7.72 million square meters. After listing, the company will continue to strengthen the outward expansion, and 65% of the raised funds will be used for acquisition and merger.

Hu Liang said that it is necessary to build the company into a property management group with the largest scale, the widest layout, the most complete format and the best benefit in the world. At present, Evergrande has signed contracts and served 1354 projects, covering more than 280 cities, with a total contracted area of 513 million square meters and an area under management of 254 million square meters. In the first half of this year, the company achieved a total revenue of 4.56 billion, a year-on-year increase of 31.7%; and a net profit of 1.15 billion, a year-on-year increase of 181.8%. Evergrande propertys net profit annual compound growth rate from 2017 to 2019 is 195.5%, ranking first in the industry.

According to the information at the promotion meeting, the IPO pricing range of Evergrande property is from HK $8.5 to HK $9.75. Wang Zhen, deputy general manager of Evergrande property, said that the recognition of the property industry by the society and the market is getting higher and higher. I believe that the listing of the company will be highly recognized by investors. According to Wang Zhen, 65% of the funds raised were used for strategic acquisitions and investment. In response to a reporters question from the securities times u00b7 e company, Wang Zhen said that the company has introduced strategic investors twice, including Internet technology giants, artificial intelligence Unicorn enterprises, well-known investment institutions and large enterprise groups, etc., and highly recognized and optimistic about the companys past performance and future development. The company is very honored to have these new shareholders join in. They have provided more abundant potential resources for the companys business development and created a broader space for expansion. In the future, the company will actively discuss with investors and establish flexible and diverse cooperative relations in different business levels and fields. Wang Zhen said. Source: Securities Times editor in charge: Yang Bin_ NF4368

The company is very honored to have these new shareholders join in. They have provided more abundant potential resources for the companys business development and created a broader space for expansion. In the future, the company will actively discuss with investors and establish flexible and diverse cooperative relations in different business levels and fields. Wang Zhen said.