- Mar 28, 2014
- China New Town completed its placing And became a member of CDB Capital
- Hong Kong and Singapore, 28 March 2014) ― China New Town Development Company Limited (the “Company”; HKSE: 1278.HK; SGX: D4N.SI), a developer specialized in planning and developing new town projects in China, is pleased to announce that the Company has completed placing 54.32% of its total enlarged share to China Development Bank International Holding Limited (“CDBIH”), a wholly-owned subsidiary of China Development Bank Capital Corporation Ltd. (“CDB Capital”) for a consideration of HK$1,443,938,689.17. The Company has officially become the core listed platform of CDB Capital’s integrated development business in the new urbanization model.
Meanwhile, as CDB Capital has become the Company’s controlling shareholder, the board of directors to the Company was reorganized immediately. Five of the existing directors, namely Shi Jian, Gu Biya, Mao Yiping, Qian Yifeng and Yu Wai Leung resigned immediately and were to be replaced by six new directors, namely Fan Haibin, Zhuo Kuo, Liu Heqiang, Zhang Yen, Yang Meiyu, and Ren Xiaowei, nominated by CDB Capital. Each of new directors possesses in-depth experience in township development and is long engaged in finance industry in China, thus the best composition on the new leadership to the Company in long run.
Achieving strong synergies as the core listed platform of the integrated development under CDB Capital in the new urbanization model
Strong synergies will be attained for the core business of the Company with its new status as the strategic subsidiary of CDB Capital.
China Development Bank and CDB Capital have distinguished position in urbanization of China. China Development is the leading bank in the process of China’s urbanization. Its support to the urbanization has been long in particular of facilitating the infrastructure of local governments, enhancing the integrated population capacities, economies and technologies of new towns, with a view towards cohesion and employments in these towns. CDB Capital is the equity investment platform of China Development Bank. With nearly fifty billion registered capital and the advantages brought by China Development Bank, CDB Capital is well-positioned in the process of urbanization. In recent years, CDB Capital has invested plenty of quality new town projects which have gained positive economic and social results.
The Company has become a key component of the CDB Capital’s national strategy on urbanization. CDB Capital’s profound brand awareness and financing capacity, strong connections with all levels of the governments, as well as the business network and the expertise at new town development are expected to significantly enhance the Company’s business scale, financial performance, influenceand competitiveness in the industry. The deal also improved the capital structure as well as the financing capacity of the Company. With the support of the group under China Development Bank, the financing cost of the Company is expected to decrease in the long run.
Systematic advantages in developing quality projects due to deep connections and strong collaboration in investments and financing with local governments
To assist the Company in further developing into the leading integrated new model township developer and operator in China, CDB Capital plans to support the Company to specialize in integrated developments of new model township and establish business throughout the country, under the condition that the Company continues operating its existing businesses, and will further optimize the Company’s business model, with a view towards enhanced sources of revenues and improved profitability. CBD Capital will also support the Company to explore other business opportunities to provide a stable cash flow and enhance the growth and outlook of the Company’s business.
To facilitate the growth and future development of the Company, CDB Capital plans to strengthen the existing management and its structure, and to make changes and additions to the management structure when appropriate after the completion of the transaction. CDB Capital will also fully capitalize its advantages to provide comprehensive support for the Company on financial services. In addition, CDB Capital will introduce more reliable business partners, suppliers, and customers using its nation-wide business network and will enhance the systematic capability of the Company in selection and negotiation of future projects with its extensive connections with local governments. While CDB Capital has at present no plan, and has not engaged in any discussion or negotiation, with respect to any injection of any assets or businesses into the Company, CDB Capital does not exclude the possibility of future asset injections into the Company and/or joint investments in attractive projects.
CDBIH has subscribed for 5,347,921,071 newly issued shares of the Company at a price of HK$0.27 per share. The total consideration of such subscription is HK$1,443,938,689.17. Upon completion, CDBIH holds approximately 54.32% of the enlarged total issued shares of the Company. The Company will become a strategic subsidiary of CDB Capital. Following to the transaction, SRE Investment Holding Limited (“SREI”), the original controlling shareholder of the Company holds approximately 14.91% of the enlarged total shares, and will continue to be a substantial shareholder of the Company. Both CDBIH and SREI will undertake a three-year lock-up period for each of their shares in the Company, with a long-term view towards investment in the Company’s outlook.
The comparison of shareholding between the times prior the CDBIH’s subscription agreement and on today is set out below:
As at the date of the subscription agreements Today Number of share Percentage Number of share Percentage CDBIH -- 0.00 % 5,347,921,071 54.32 % SREI 1,468,356,862 32.64 % 1,468,356,862 14.91% Other shareholders 3,029,841,814 67.36 % 3,029,841,814 30.77 %