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Skyfame Realty unit enters 4.84B yuan deals to buy Chinese property developer

Skyfame Realty (Holdings) Ltd. subsidiary Guangzhou Chuangfu Realty Co. Ltd. signed a deal with state-owned enterprise Zhonghe Real Estate Development Co. Ltd. for the roughly 434.5 million yuan purchase of a 79% stake in Chongqing Hesheng Real Estate Development Co. Ltd., a property developer in Chongqing, China.

Guangzhou Chuangfu won the right to acquire the equity after it won the auction on the China Beijing Equity Exchange. As part of the deal, the subsidiary will also shoulder the repayment of the target's debt to Zhonghe Real Estate, amounting to roughly 4.07 billion yuan plus nearly 168.1 million yuan to cover accrued interest until Dec. 20, 2017.

Upon settlement of the loan, Skyfame Realty said Guangzhou Chuangfu will also participate in the bidding for Zhonghe Real Estate's remaining 1% interest in Chongqing Hesheng, which will be listed at a price of approximately 5.5 million yuan.

Chongqing Hesheng is 80% held by Zhonghe Real Estate and 20% by Chongqing Shengdiya Property (Group) Co. Ltd., as of March 13. On Jan. 7, Guangzhou Chuangfu already signed the approximately 160.0 million yuan agreement for the purchase of Chongqing Shengdiya's shareholding in the target, Skyfame Realty noted.

According to a filing, Chongqing Hesheng is principally engaged in the development of a commercial project in Chongqing, which comprises two phases with respective gross floor areas of 244,402 square meters and 592,387 square meters. The commercial site under development forms part of a six-plot project area with a combined area of 219,936 square meters that is earmarked for a proposed mixed-use scheme.

As of March 12, US$1 was equivalent to 6.33 yuan.