(Yicai Global) Aug. 9 -- Cofco Property (Group) Co., Ltd. [SHE:000031] plans to participate in the acquisition of a Shenzhen-based home-appliance producer, so as to develop land plots owned by the company, in another step forward in China's ongoing reforms to its state sector.
The real estate subsidiary said its Shenzhen company will set up a joint venture with investment firm Shenzhen Huijin Qihao Investment Partnership, each holding a 50 percent stake. The joint venture plans to purchase a 100 percent stake in Changying Appliance (Shenzhen) Co. from Changying Enterprise (Hong Kong) Co. for CNY1.08 billion (USD149.85 million).
Changying Appliance suffered a loss of CNY26.71 million last year, however the company has plots of land with an area of nearly 100,000 square meters, valued at about CNY1 billion, according to the announcement.
After conducting a feasibility study for project development of the land plots, Cofco Property believes they have a substantial geographical advantage, high market value and great potential for regional projects. If the acquisition goes through and project development is successfully achieved, it will help the company expand new businesses in Shenzhen and further accelerate the development of its property development business.
Cofco Property Group is a wholly owned subsidiary of China National Cereals, Oils and Foodstuffs Corporation, one of China's largest central state-owned enterprises. Apart from its massive food processing division, Cofco has developed itself into a diversified conglomerate.
Its many subsidiaries involve planting, cultivation, food-processing, finance, warehousing, transportation, port facilities, hotels and real estate. It ranked 272nd on the Fortune 500 list of the world's biggest companies last year, and it has four Hong Kong-listed companies and three A-share listed firms.