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Beijing Capital expects 590M yuan from auction of 51% stake in subsidiary

Beijing Capital Land Ltd. is expecting profit before tax of approximately 590.0 million yuan from the auction on the China Beijing Equity Exchange, or CBEX, of a 51% stake in its Beijing Kaiyuanhean Investment Management Co. Ltd. subsidiary.

The selling state-controlled property company attached an estimated 598.2 million-yuan asking price to the stake, the sale of which was announced on the CBEX Sept. 3.

The successful bidder in the auction is required to sign an asset transaction agreement with Beijing Capital. Before the CBEX issues a transaction confirmation, the winning bidder also has to repay the nearly 1.19 billion-yuan loan provided by the vendor to Beijing Kaiyuanhean, according to a filing.

Beijing Capital said proceeds from the stake divestment will be used for its general working capital.

Beijing Kaiyuanhean is a limited liability company incorporated in China that is principally engaged in the development and operation of a project in Beijing's Lize Finance and Commerce Area. Its parent added that the sale of its majority stake in the subsidiary could deliver profits, increase its liquidity and improve the efficiency of its capital use, among other benefits.

As of Sept. 5, US$1 was equivalent to 6.83 yuan.