China approves first placement of developer shares since 2015 – Kommersant

The China Securities Commission has approved an 8.5 billion yuan ($1.2 billion) private placement application by China Merchants Shekou Industrial Zone Holdings. This is the first permit issued by the regulator to a local developer since 2015. Bloomberg.

China Merchants Shekou Industrial Zone Holdings is the sixth largest real estate operator in China. Back in December last year, the company announced its intention to sell its shares to the municipal authorities of Shenzhen, and use the proceeds to build facilities and pay off debts. The company itself is state-owned and based in Shenzhen.

In November last year, the Chinese authorities lifted the ban on developers to raise funds by selling shares, thus trying to bring the sector out of a crisis. According to Bloomberg, at least five more developers intend to conduct a private placement of shares.

The Chinese real estate sector has been in a protracted crisis since autumn 2021. Then became known about the financial problems of the China Evergrande Group development holding, whose debts exceeded $300 billion. Last July reportedthat the Chinese government intends to allocate a total of 1 trillion yuan ($148 billion) to support troubled developers.

Kirill Sarkhanyants