GIC raises stake in Franshion Properties to 6.5%

HONG KONG – Singapore’s sovereign wealth fund, GIC, has invested another HK$1.16 billion (S$202 million) in Hong Kong-listed Franshion Properties, more than doubling its stake in the property developer to make it the third largest shareholder in the company.

Franshion Properties placed 1.6 billion new shares at HK$2.73 each to a group of investors including GIC, New China Life Insurance, Earn Max Enterprises and Dynasty Hill Holdings, it said in a regulatory filing with the Hong Kong stock exchange today (June 9).

The placement price represented a discount of 9.9 per cent from the closing price of HK$3.03 per share on Monday, the last full trading day prior to the release of today’s announcement.

GIC, which held 272.1 million Franshion Properties shares before the placement, received more than 425.9 million new shares, raising its stake in the company to 6.5 per cent from 3 per cent. Sinochem Hong Kong, which did not take part in the placement, saw its stake diluted to 54 per cent from 63.5 per cent. New China Life Insurance, a new investor in the company, received more than 1 billion shares to become the second largest shareholder with 9.5 per cent.

Although incorporated and listed in Hong Kong, the bulk of Franshion Properties’ business is in mainland China. The net proceeds of HK$4.35 billion from the placement will be used for general working capital, potential investments to be identified and refinancing debt, the company said.

Franshion is raising funds as the Chinese real estate market starts to recover and the nation’s stock market surges to a seven-year high, Bloomberg reported. The offering adds to the 168 billion yuan of share sales announced by developers in greater China this year, data compiled by Bloomberg showed.