Just three weeks after its now former chairman was detained on charges of molesting a nine-year-old girl, Future Land Holdings has confirmed in a voluntary announcement to the Hong Kong Stock Exchange today that it plans to dispose of more than three dozen real estate projects in China.
“As of the date of this announcement, Seazen Holdings is negotiating on the sale of about 40 projects (including joint venture and associate projects) but there remains uncertainty as to the scope of target project company to be disposed, the counterparties and the consideration,” the company said in the statement.
The notice to the exchange came after Future Land and its Shanghai-listed subsidiary Seazen Holdings had been the subject of reports in the media of a potential sell-off of 68 developments.
Five Projects Already Sold
The announcement by Future Land, which is now chaired by 31-year-0ld Wang Xiaosong, after his father, Wang Zhenhua, was jailed by the Shanghai police, made clear that negotiations with partners are still ongoing but that it has already signed equity transfer agreements for five projects, taking in RMB 2.4 billion ($349 million) in income.
Without revealing how much it hopes to earn from further project sales, the company indicated that it hopes the sale of equity in the subsidiaries would help it recoup part of the land premiums that the group paid to acquire sites during the first half of the year.
The 40 projects (including joint venture and associate projects) that are currently under discussion include both joint venture and associate projects invested by Future Land and Seazen, with local media reports indicating that at least some of the developments are being sold at below market rate to small and medium sized Chinese developers.
Future Land noted in the statement that the transfer of the equity interests would not materially affect Seazen Holdings’ operating results in 2019, and indicated that it expects the proceeds of the asset sales would strengthen its available cash pool and “optimize its asset structure.”
China’s 8th Largest Developer Still Hopeful on Sales
The Changzhou-based builder, which ranked eighth among mainland China’s largest developers in the first half of 2019 with nearly RMB 124 billion in contracted sales, added that it plans to maintains its sales target for 2019 of RMB 270 billion, while forecasting smooth performance in the future.
“The company is of the view that the overall management team and personnel structure of the company are stable, and the operations of the group are normal,” it said. “The company will continue to carry out its businesses to reach its annual sales target as scheduled.”
Then chairman of Future Land and Seazen Wang Zhenhua earlier this month, surrendered to the police for on charges of sexually assaulting a girl from Jiangsu province who had been provided to him in Shanghai by an apparent accomplice. The fifty-seven-year-old company founder was subsequently removed as chairman of the Hong Kong-listed developer.