- Nov 12, 2015
- China New Town Invests RMB 300 million into the Development of Yangzhou Airport New Town
(Hong Kong and Singapore, 11 November 2015) ― China New Town Development Company Limited – the future blueprint planner and leading developer of integrated new towns in China (the “Company”, “CNTD”, the “Group”; HKSE: 1278.HK; SGX: D4N.SI), is pleased to announce that the Company has entered into a Memorandum of Understanding (the “MOU”) with the Administrative Committee of Yangzhou Airport New Town (the “Committee”) and Hengfeng Bank Company Limited, Yangzhou branch (“Hengfeng Bank”) regarding the comprehensive cooperation on the development of Yangzhou Airport New Town ("Yangzhou Airport New Town"). The Company will invest a total amount of RMB 300 million into the development of Yangzhou Airport New Town by way of direct equity investment at the relevant project company and the establishment of a project finance partnership, and shall enjoy a guaranteed fixed return of 13% per annum on its invested capital. Such investment return shall be included in the annual budget of Yangzhou Jiangdu District Government, with the benefit of a commensurate security package as further credit enhancement measures. At the same time, Hengfeng Bank and the Committee shall respectively contribute RMB 1 billion and RMB 300 million to the relevant project company.
In additional to the capital investment, the Company shall provide operation and management support to the growth of Yangzhou Airport New Town, with comprehensive scope covering regional planning, business and investment sourcing, as well as nurturing regional industrial growth. The relevant government will provide incentive measures such as performance fees on business sourcing to share the economic value with the Company, which is expected to further boost our return on the project. In addition, upon identifying specific projects with visible profit models, such as industrial park operation and intelligent city operation, the Company shall explore establishing dedicated joint venture with the Committee to carry out the relevant investments, executions and subsequent operations. The Company is expected to explore exciting opportunities in new town development and construction and create greater return for its shareholders.
Yangzhou Airport New Town is an industrial new town built around and fueled by the Yangzhou-Taizhou International Airport (the “Yang-Tai Airport”). The Yang-Tai Airport is located in the prime zone of Yangzhou with a planning area of over 20 square kilometers, therefore enjoying unique location advantage. Yangzhou Airport New Town is located at a strategic location within the Yangtze River Delta and Jiangsu Province, right at the geographical and economic center of Central Jiangsu, simultaneously connecting the vibrant regions of Shanghai, Southern Jiangsu and Central-Northern Jiangsu and Shanghai. In addition, Yangzhou Airport New Town extends the Shanghai and Nanjing metropolitan circles with a dual population coverage of more than 10 million people by leveraging its integrated “water-road-air” transportation network. The development vision for Yangzhou Airport New Town aspires for an airport-powered economic center and integrated industrial-township development showcase supported by the pillar industries of airport logistics, electronic and information engineering, general aviation and high-end commercial services.
Yangzhou Airport New Town Project is the third project launched in Jiangsu Province by the Company following the Nanjing Project and Danyang Project, fully reflecting the Company’s capability of replicating project development model to other attractive locations by utilizing and integrating the resources of China Development Bank (“CDB”). With abundant capital and fiscal solvency, Jiangdu District ranks highest in Yangzhou in terms of major social and economic development indicators. The district government has robust financial position which enables the government to guarantee the Company’s investment return. This project fully reflects the Company’s business strategy in new town development. Besides executing the national policy of integrated industrial-township growth through providing value-added service, covering merchandising and investment sourcing, regional construction and operation, etc., to enhance the regional land value, the Company also explore new asset-light model to tap into extra high profit. The Company will explore exclusive opportunities to participate projects that emerge from the launching of series of urbanization projects, and earn attractive profits from the value-add services along the entire value chain of township development and create greater value and return for our shareholders.
The spokesperson of CNTD comments, ‘‘Looking ahead, the Company will continue to strengthen its presence in the prosperous Yangtze River Delta by riding on the synergy embodied by China Development Bank. We will swiftly explore new town development projects, and by focusing on our low-risk investment model that comes with fixed-income and the highly profitable asset-light model for the downstream projects, we will continue to consolidate and enhance the influence and brand of China New Town in Yangtsz River Delta, so as to reinforce the confidence and create greater returns of the shareholders.”