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Yuexiu Property subsidiary to buy 92% stake in project company for 3.32B yuan

Yuexiu Property Co. Ltd.'s Guangzhou Superland Economic & Information Consulting Co. Ltd. is exercising a call option to acquire a 92% equity interest in a project company for 3.32 billion yuan.

The call option agreement was signed by joint venture partners Guangzhou City Construction & Development Group Nansha Co. Ltd. and Guangzhou Yuexiu Renda No. 4 Business Investment Enterprise (LP). The deal has given Guangzhou City Construction or Guangzhou Superland the right to purchase Guangzhou Yuexiu's stake in the project company, of which Guangzhou Superland has agreed to exercise.

Under the agreement, Guangzhou Superland will extend a 3.25 billion-yuan shareholder's loan to the project company to repay in full a loan owed to Guangzhou Yuexiu, with the remaining sum from the total consideration representing the amount payable for the equity transfer.

The project company is undertaking a large-scale development on a 147,240-square-meter site in Wuhan, China, which will house a mixed-use residential and commercial complex. The company's directors deem the stake acquisition in the project company an opportunity to increase its land bank in the city, as well as to contribute to the group's income and cash flow.

As of Feb. 14, US$1 was equivalent to 6.34 yuan.