(Yicai Global) Dec. 9 -- Shares of Gree Real Estate rose by the daily limit after the Chinese property developer boosted its fundraising target to support the acquisition of Zhuhai Duty Free Enterprises Group, a major tax-free retailer, following relaxed regulations.

Gree Real Estate's equity price [SHA: 600185] soared by 10 percent to close at CNY7.16 (USD1), almost 5 percent up this year.

The company intends to raise more than CNY800 million (USD115.1 million) from select investors via private placement, up from the earlier plan of no more than CNY800 million, the Zhuhai-based firm said in a statement yesterday. 

Besides the acquisition, some of the proceeds will be spent on building ongoing apartment projects, replenishing working capital, and paying off debts, based on the new plan.

In October 2020, Gree Real Estate proposed purchasing Zhuhai Duty Free for CNY12.2 billion (USD1.8 billion), and more than 90 percent of that was supposed to be paid by issuing new shares. However, the scheme was suspended after the firm's former chief Lu Junsi was suspected of insider trading, based on a statement from December 2020. Last month, Gree Real Estate chose Chen Hui as its new chairman.

The offering price is CNY5.38 per share, up from the earlier ask of CNY4.3 announced in 2020, according to the new scheme.

The two companies are affiliated. The Zhuhai branch of the State-Owned Assets Supervision and Administration Commission holds a 77 percent stake in Zhuhai Duty Free while the state asset manager is also the largest shareholder of Gree Real Estate with its nearly 45 percent stake, according to public data. Another big equity holder of the retailer is Zhuhai Urban Construction Group, holding 23 percent of all stock.

More than 10 Chinese property firms, including Shimao, Xinhu Zhongbao, and Greattown Holdings, have disclosed refinancing plans after the main securities regulator said on Nov. 28 that listed developers can restart refinancing, restructuring, as well as mergers and acquisitions after a 12-year hiatus in an attempt to underpin the recovery of the real estate industry.

Editor: Emmi Laine, Xiao Yi