Another chunk of troubled real estate developer Greentown China was bitten off and swallowed by Hong Kong’s Wharf on August 2nd, as the Hong Kong based property firm continued what will likely be its eventual takeover of Hangzhou-based Greentown.
Following a Greentown shareholders’ meeting on August 1st, the company announced that a second tranche of 162,113,714 new shares, were issued to Wharf in return for compensation of approximately HK$868 million.
Upon completion of the sale, Mr Tsui Yiu Cheung (Xu Yaoxiang) became a non-executive Director of Greentown.
Following this latest transaction, Greentown CEO Song Weiping remains the company’s largest shareholder, although his shareholding has been diluted from 33 percent to 25.4 percent. Wharf now holds 24.6 percent of the company, making it the second largest shareholder of Greentown.
This deal followed the sale of 2.13 percent of Greentown to Wharf and its affiliate Wheelock HK$181 million (RMB 148.32 mil) during June. Prior to that sale, Wharf already owned 2.1 percent of Greentown, and if it exercises all of its rights under the sale, its stake in Greentown would rise to 35.1%, which would make it the developer’s largest shareholder, according to earlier company statements.
Greentown became badly overextended during the residential real estate boom and since then has been selling assets and now equity as it struggles to stay afloat. Ironically, the company’s sale of shares to Wharf made Greentown China’s first Fortune Global 500 real estate firm.