On the afternoon of Feb 22, City Developments (CDL) made an SGXnet compliance announcement on interested party transactions, and a press release on corporate action to improve the liquidity of Sincere Property Group in which it acquired a 51% stake for $1.8 billion. The SGX announcement and the press release are unrelated, with the press release indicating that the monetisation of Sincere Property’s assets has begun, with CDL acquiring an asset with pre-sales equivalent of $1,477 million, for $174 million. This takes CDL's total outlay -to date - for Sincere up to almost $2 billion.
CDL announced it has entered into agreements to acquire a 55% interest in a Shenzhen technology park through the acquisition of an 84.6% equity interest in Shenzhen Tusincere Technology Park Development Co for RMB859 million ($174 million), and assume existing shareholder loans proportionately. Sincere will hold the remaining 15.4% equity in Shenzhen Tusincere Technology Park Development Co. With the further cash infusion it is unclear if Sincere's NAV will rise. However, CDL's debt could rise because of the shareholder loans.
Shenzhen Tusincere Technology Park Development Co in turn holds a 65% equity interest in Shenzhen Longgang Tusincere Tech Park which has been valued at RMB8.8 billion (or $1,805 million) by independent valuer, Cushman & Wakefield. The remaining 35% equity interest of the Shenzhen Longgang Tusincere Tech Park is held by Shenzhen Longgang District, a state-owned enterprise.
