Friday, May 02, 2008; Posted: 04:33 AM
They seem urgent to finance in the capital market in face of climbing property prices, highflying land prices and a broad range of macro control measures over property sector.
To skirt the complicated application procedure for an initial public offering, real estate developers prefer to launch a back door listing.
Many of them have announced such plans since the start of 2008. Zhongnan Real Estate Development Co. is on the verge of realizing a back door listing through Shenzhen-listed Dalian Jinniu Co., Ltd. (000961.SZ).
According to the restructuring scheme of Dalian Jinniu, the real estate developer plans to buy 90 million shares in the listed company to become the largest shareholder. The shell company currently focuses on special steel production.
They expect to complete the restructuring before April 28 and Dalian Jinniu will resume share trading on certain date.
Shandong Wanjie High-Tech Co. (600223.SH) announced in January that it would issue not more than 882.35 million shares to five selected investors including state-owned Shandong Commercial Group in exchange for certain proportion of their stakes in five property companies.
The deal is subject to approval of the State-owned Assets Supervision and Administration Commission of Shandong province and China Securities Regulatory Commission.
Success Information Industry Group Co. (000517.SZ) has signed an agreement to place 828 million shares to Rongan Group, a Ningbo-based private real estate developer. The latter would inject CNY 2.4 billion worth of real estate assets into the Shenzhen-listed company as consideration. Upon the private share placement, Rongan Group will have a controlling 78.01 percent stake in Success Information Industry, thus achieving a back door listing.
Since the second half of 2006, dozens of real estate developers have completed back door listings. Statistics show of the about 100 property companies listed in Shanghai and Shenzhen, only 40 ones got listed after IPOs while about 50 ones listed via back door listing.
Since most of the target shell companies are under special treatment in line with the securities rules and their majority shareholders are hard to bail them out, real estate developers will be easier to buy controlling stakes in them. On the other hand, the real estate asset securitization can lay solid foundation for their future capital maneuvers.
(USD 1 = CNY 6.98)
From www.cnstock.com, Page 1, Wednesday, April 30, 2008 info@SinoCast.com
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