March 18, 2014 / 7:11 AM / 4 years ago

Property developer Greenland plans backdoor listing in Shanghai via asset swap

HONG KONG, March 18 (Reuters) - China’s Greenland Group is seeking to list in Shanghai via an asset swap with an affiliate as the state-backed property developer steps up investment in Asia and Europe.

Greenland, which has made two prominent London acquisitions so far this year, is among Chinese developers hunting for investment opportunities abroad as Beijing cools the country’s red-hot property market.

The overseas expansion has pushed some real estate firms to look for new financing channels onshore and offshore as Beijing clamps down on bank lending to developers in its efforts to stabilise China’s property sector.

The tightening in bank lending has tripped some Chinese property firms, already struggling with mounting debts, easing sale prices and shrinking profits.

In a statement on Monday evening, Shanghai Jinfeng Investment said Greenland will inject 65.5 billion yuan ($10.60 billion) of assets into Jinfeng in exchange for 11.3 billion new Jinfeng shares at 5.58 yuan each.

After the transaction, Jinfeng will hold 100 percent of Greenland.

Shares of Jingfeng jumped 10 percent at 0606 GMT on Tuesday to 5.75 yuan.

Fellow developer China Vanke Co Ltd said earlier this month it has won approval from Chinese regulators for a stock market listing in Hong Kong by way of introduction, paving the way for fresh funding from overseas.

Greenland has been investing heavily offshore. It aims to achieve overseas sales of 20 billion yuan this year, including sales from projects in Britain, the United States, Canada, Thailand and Malaysia.

The fund-raising plans are in stark contrast to other Chinese property developers that have been less successful in raising capital and are stuck with high debts.

Chinese government officials told Reuters that heavily indebted Zhejiang Xingrun Real Estate Co, based in the coastal city of Ningbo in eastern Zhejiang province, is on the brink of bankruptcy. ($1 = 6.1781 Chinese Yuan) (Reporting by Clare Jim; Editing by Ryan Woo)

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