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China Merchants restructures project company in 2.11B yuan deal with Wharf JV

Foshan Merchants Property Development Co. Ltd., a subsidiary of China Merchants Land Ltd., agreed to sell its entire 100% stake in a Chinese project company to a 50/50 joint venture between its parent and Wharf (Holdings) Ltd. for approximately 2.11 billion yuan.

Under the deal, Foshan Merchants Property will transfer its shareholding in Foshan Merchants Brilliant Property Development Co. Ltd. to Foshan Yi Yun Property Development Co. Ltd.

The target company oversees the development of a roughly 81,356.9-square-meter mixed commercial and residential site in Foshan, China, that Foshan Merchants Property won in an auction with a bid of about 2.02 billion yuan. Construction works on the site started in the fourth quarter and are expected to be completed in the third quarter of 2022.

In a filing, China Merchants said that a roughly 10.3 million yuan gain is expected from the stake transfer, which upon completion will make Foshan Merchants Brilliant a 50%-held entity by China Merchants and Wharf, respectively.

As of Dec. 18, US$1 was equivalent to 6.62 yuan.