(Yicai) Sept. 23 -- China Aoyuan Group’s shares closed 127 percent higher after the developer said UAE-based investment firm Multi Gold Group has become its main shareholder, marking a major change in ownership as the builder seeks financial stability after years of debt struggles.

Aoyuan [HKG: 3883] finished at 27 Hong Kong cents (3 US cents) a share in Hong Kong today, after earlier skyrocketing by as much as 150 percent.

Multi Gold agreed to buy about 621.7 million Aoyuan shares from Ace Rise on Sept. 20, giving it a 16.5 percent stake in the firm, the Guangzhou-based developer announced on the same day.

The move “represents a long-term strategic investment by Multi Gold and demonstrates Multi Gold’s confidence about the future of China,” Aoyuan said. “Multi Gold is likely to develop a material strategic relationship with Aoyuan in connection with and related to its present or future business,” it added.

Like other builders, Aoyuan has struggled with big debts and slow sales amid the protracted slump in China’s real estate market. Sales hit CNY133 billion (USD18.9 billion) in 2020, but by early 2022 Aoyuan said that it would not pay or redeem its large US dollar-denominated debts. Earlier this year, the firm restructured about USD6.1 billion of overseas debt.

After the deal closes, Ace Rise’s stake in Aoyuan will fall to 13.3 percent. Aoyuan’s founder Guo Ziwen, who owns Ace Rise, will then have a total stake of 16.4 percent.

As part of the deal, Guo stepped down from all his key positions in Aoyuan and Multi Gold Director Mohamed Obaid Ghulam Badakkan Alobeidli became its new chairman and non-executive director. Alobeidli, 45, has over 20 years of experience in technology, real estate, and strategic consulting.

In the first half of the year, Aoyuan’s revenue fell 57 percent to CNY4.6 billion (USD652.6 million) from a year earlier. But the company turned a net loss of CNY2.9 billion into a net profit of CNY22.3 billion (USD3.2 billion) in the period.

Multi Gold is a specialized investment firm that focuses on sustainability and social responsibility projects in the Middle East and North Africa.

Editor: Futura Costaglione