VANKE is working toward acquiring a 71 percent stake in Shenzhen Construction Group for up to 832 million yuan (US$125 million), the Shenzhen Economic Daily reported yesterday.
Shenzhen Construction Group is one of the three companies in Guangdong that own the State-level housing contracting qualification. But the qualification will be terminated at the end of the year. To keep its qualification, the company management decided to sell the company.
The report said Vanke sent a letter of intent this June to acquire the stake in Shenzhen Construction Group and promised at least a three-year employment guarantee for the group s employees. The two sides had been negotiating since July, the report said.
The Southern Metropolis Daily said Ping An Trust and Investment produced a report which regarded Vanke as a competitor for the purchase of Shenzhen Construction Group. Ping An plans to cooperate with Meixin Assets Management to lend 800 million yuan and 100 million yuan respectively to the group to acquire its 71 percent stake from its employees.
Under Ping An s acquisition plan, it would have 55 percent of the 71 percent stake, 8 percent would be transferred to Meixin and the group management would obtain an 8 percent stake.
Vanke said the deal was still being negotiated, while Ping An Insurance (Group) denied reports of its intention to acquire the group.
Following its capital restructuring in 2007, the 71 percent stake in the group is held by its 186 employees, and the remaining 29 percent stake is held by Shenzhen Investment Holdings. More than 90 percent of the 186 employees agreed in June to transfer their shares to Vanke this June.
Vanke is the country s largest listed real estate developer.
(Han Ximin)
