Sichuan Expressway Plans Up To RMB 12 Billion REIT-Style Offering In Shanghai

Sichuan Expressway (00107) said it plans to launch a REIT-style product on the Shanghai Stock Exchange in September or later, with a registered issuance size of no more than RMB 12 billion, according to ETNet. Under the agreement, CITIC Securities will act as the special plan manager. Sichuan Expressway, its subsidiary Chengyu Investment, and Tianjin Green Power Management and Operation Co. will set up a partnership, with Sichuan Expressway as a class B limited partner, Chengyu Investment as the general partner holding about 20%, and Tianjin Green Power as the original rights holder and class A limited partner holding about 80%. The partnership will have registered capital of about RMB 15 billion, including about RMB 3 billion in combined capital contributions from Sichuan Expressway and its subsidiary, and about RMB 12 billion from Tianjin Green Power. Tianjin Green Power will then transfer its class A limited partnership interest to CITIC Securities, which will make an actual capital contribution of about RMB 12 billion. After the REIT-style vehicle is established, Sichuan Expressway will sell about 51% of the equity in Sichuan Rongcheng Second Ring Expressway Development Co. to the vehicle for about RMB 3.794 billion. After necessary reserves are set aside, about RMB 11.2 billion of the remaining funds will be used to lend to Sichuan Rongcheng, including about RMB 9.489 billion to repay existing debt, about RMB 450 million to repay Sichuan Expressway, and about RMB 9.039 billion to repay banks and other external financial institutions, with the balance to replenish working capital.