HK's New World Development to take China property unit private for $2.4 bln, plans rights issue

HONG KONG, March 14 Thu Mar 13, 2014 9:32pm EDT

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HONG KONG, March 14 (Reuters) - Hong Kong property developer New World Development Co Ltd said on Friday it will take its majority-owned New World China Land Ltd unit private for HK$18.6 billion ($2.4 billion), seeking more flexibility in managing its flagship China-focused property business.

New World Development said it will finance the deal through a credit facility. Separately, it said it plans to raise up to HK$13.99 billion ($1.80 billion) through a rights issue of its own shares that it said would "enhance its financial resilience".

Trading in shares in both New World Development and New World China Land, which was suspended on Tuesday, resumed on Friday.

New World Development, which currently owns 68.89 percent of New World China Land, will offer HK$6.80 for each of the shares it doesn't already own, the two companies said in a joint statement. That represents a 32.3 percent premium to the previous close.

The offer price also represents a 1.8 percent premium to New World China Land's unaudited consolidated net asset value of HK$6.68 per share as at December 31, 2013.

In a separate statement, New World Development said it plans to sell up to 2.256 billion shares, giving its investors the right to buy one new share for every three currently held at a prcie of HK$6.20 apiece. That represents a 36.3 percent discount to the previous close.

($1 = 7.7649 Hong Kong Dollars) (Reporting by Donny Kwok; Editing by Kenneth Maxwell)

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