Shenzhen Holdings Unit Settles RMB 110 Million Equity Transfer With Property Offset

Shenzhen Holdings said on Friday that its non-wholly owned subsidiary Shenye Tairan Land and its controlling shareholder Shenye Group, each holding 50% of Shenye Wansheng, signed a debt offset agreement to sell title to offset properties to Zhongshan Wanye, a company 99% owned by Vanke, according to ETNet. The agreement settles about RMB 110 million payable by Shenye Group under an equity transfer deal signed in August and offsets an equivalent amount of outstanding shareholder loans owed by Shenye Wansheng to Shenye Group. Shenzhen Holdings expects to book a gross profit of about RMB 12.7 million from the sale. The offset properties comprise 171 office units in Building 2 of Wanyin Wanchao Plaza in Cuiheng New District, Zhongshan, with a total gross floor area of 7,576.4 square metres. They were valued at about RMB 109 million on August 5 and generated no rental income because they were held for sale. Shenzhen Holdings said the arrangement provides liquidity for the less liquid properties, helps the controlling shareholder settle the related equity transfer consideration, and reduces Shenye Wansheng's leverage and debt burden.