US investors help Chinese developer survive in troubled property market
Shanghai Daily news
JP Morgan and Stark Investment have underwritten convertible bonds and equity
shares worth US$150 million issued by China Greentown Group, one of the nation's
largest private developers.
Hangzhou, Zhejiang Province-based Greentown said
in a statement yesterday that the consortium managed a bond sale in the
Singapore stock market for it on January 10.
The two US investors have also
acquired an undisclosed ownership stake in the developer.
has more than 40 ongoing development projects across the country, has been
actively seeking more financing tools since domestic banks restricted lending to
the real estate industry last year.
JP Morgan and Stark Investment will also
help Greentown secure an overseas listing to raise more capital in the near
future, according to Song Weiping, Greentown's board director.
The deal is
the latest example of involvement by overseas institutional investors in
expanding domestic developer's financing channels.
"With a slowdown in volume
and a drop in housing prices starting from the second half of last year,
developers in China definitely feel pressure financially," said Michael T. Hart,
head of research at Jones Lang LaSalle Shanghai.
Shanghai Greenland Group,
one of the city's largest developers, last month received a 700 million yuan
(US$87 million) loan from Hypo Real Estate Bank International, a German real
estate fund, to finance residential projects in the city.
In the same month,
China Vanke Co Ltd set up a real estate fund with Hong Kong-based Citic Capital
Markets Holdings Ltd, to raise up to US$150 million.
Ralph X. Parks, Asia
chairman of JPMorgan, expects the investment return from the Greentown deal will
be no less than 20 percent. Greentown said its sales maintained growth last year
despite the industry downtown.