(Yicai Global) Dec. 26 -- Beingmate Baby & Child Food Co. [SHE:002570] plans to sell off 22 properties in China to non-affiliated companies as it strives to avoid being red-flagged on the A-share market.
The Hangzhou-based food maker will ditch a total of more than 3,398 square meters of property worth CNY104 million (USD16 million) in Hangzhou, Chongqing, Chengdu, Wuhan, Shenzhen, Guangzhou and Beijing, it said in a statement.
The move follows the sale of seven properties for CNY23 million in October and its 100-percent stake in Beingmate Anda Dairy Co to its controlling shareholder, Beingmate Group, and other affiliates for CNY180 million in September.
Beingmate lost CNY781 million last year and needs to turn around CNY300 million in third-quarter losses to avoid a second consecutive year of losing money and being labeled as 'special treatment' on the stock market. The ST stamp marks A-share companies that have lost money for two straight years and Beingmate is pulling out all the stops to avoid it, insiders said, adding that a property dump is just one way to go about it.
ST companies are prone to selling property and land and seeking government subsidies to avoid the risk of delisting. Many listed firms claim they are selling properties to improve their asset operating efficiency, but the real reason is often to improve the bottom line and avoid the ST mark or forced delisting.
The China Securities Regulatory Commission stepped up its crackdown on companies dressing up profit figures this year. Those looking to ditch property, land and equity to avoid delisting will face new supervisory procedures, a spokesperson for the ministry said on Nov. 10.