China Oceanwide's USD1.2 Billion San Francisco Project Sale Sends Stock Ballistic
DATE:  Mar 31 2020
/ SOURCE:  yicai
China Oceanwide's USD1.2 Billion San Francisco Project Sale Sends Stock Ballistic China Oceanwide's USD1.2 Billion San Francisco Project Sale Sends Stock Ballistic

(Yicai Global) March 31 -- China Oceanwide Holdings plans to sell overseas properties and construction land on historic First Street and Mission Street in San Francisco to Hony Capital Mezzanine Fund 2019 for USD1.2 billion, the company said in a statement yesterday that shot its shares [HKG:0715] up by 17.65 percent to HKD0.20 (0.03 US cents) this morning.

Beijing-based Oceanwide will completely divest the San Francisco project, which is designed to be the bay-side city's second-tallest office block, after the transaction, which represents a USD194 million premium on a previous abortive agreement with another prospective buyer, which will help optimize the company's asset position abroad and effectively reduce its overseas operating risks, it said.

The company is driving its development strategy of transforming from a realty company to a comprehensive one with financial, real estate and strategic investment businesses, it said in a Jan. 23 statement. Oceanwide has slowed the pace of capital investment and development of overseas projects and may sell some projects in light of China's overseas investment policies and changes in the US real estate cycle, it said.

Oceanwide penned an earlier deal to transfer the above assets to China-based asset management company SPF Group for about USD1 billion, it announced in January. This was a USD276 million dollar loss on its purchase price five years ago, various media reported.

The deadline for a due diligence was March 25, in that deal, the firm said yesterday. It received a termination notice on March 25, so the transaction did not go through, however.

Oceanwide then announced that it had inked a framework agreement with Beijing-based Hony Capital only four days later, with that due diligence period to end June 30.

The company's overseas real estate layout is mainly New York, Los Angeles, San Francisco, and Hawaii, of which the projects in Los Angeles and San Francisco had begun construction and other projects were in the early planning and design stage, according to a record of investor relations activities the firm disclosed on March 14 last year.

Editor: Ben Armour

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Keywords:   Oceanwide Holdings,San Francisco,SPF Group