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Poly Real Estate to sell 27 percent stake
Last Updated(Beijing Time):2006-07-06 14:56
Poly Real Estate Group Co, China's largest state-owned developer, plans to sell a 27 percent stake in an initial share sale in Shanghai to finance projects after the government tightened bank lending to the property industry.

Poly, which has 8 billion yuan (US$1 billion) of assets, will offer 150 million new local-currency shares, the Guangzhou-based company said in a filing to the Shanghai Stock Exchange yesterday. Citic Securities Co was appointed to arrange the sale, the statement said, without giving a price or fund-raising target.

China has ordered banks to restrict lending for real estate out of concern that investment and prices are rising too rapidly, prompting developers such as Shimao Property Holdings Ltd to raise funds by selling equity. Shares of Shimao Property, controlled by China mainland's fifth-richest man, surged as much as 12 percent on their first day of trading in Hong Kong yesterday.

Demand for apartments, offices and shopping malls is increasing in China, driven by rising incomes and economic growth that reached 10.3 percent in the first quarter. Poly Real Estate's net income more than doubled to 406.8 million yuan last year and the company has land reserves of 8.77 million square meters, according to yesterday's statement.

The company is 75 percent owned by China Poly Group Corp and the parent's stake will fall to 55 percent after the share sale.

Poly Real Estate will invite institutional investors to advise on the offer price starting yesterday, with a price range scheduled to be announced on July 18, the statement said. The sale is due to be completed by August 3.

Shimao, founded in 2001 by billionaire Xu Rongmao, raised HK$3.72 billion (US$479 million), the minimum it sought, in an initial public offering in Hong Kong last week. The company's shares rose 0.5 yuan, or 8 percent, to HK$6.75 as of lunchtime on the Hong Kong stock exchange.
Source:Shanghai Daily 
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