‘Hangzhou-based damsel-in-distress seeks knight in shining armour.’ It may sound like a note in a personal column but it fairly accurately describes Greentown’s determination to reel in a white knight investor – in this case in the shape of Hong Kong’s Wharf Holdings.
The struggling Hangzhou property company (see WiC134 for more details) has one of the sector’s weakest balance sheets, while Wharf sees value in Greentown’s “decent” land bank, according to the Lex column in the FT.
Wharf has purchased 22% of the Chinese developer for HK$2.6 billion, and in addition holds HK$2.6 billion of convertible bonds. This marks its biggest China bet, and may indicate a view that the mainland’s residential property market has bottomed. For Greentown the acquisition will bolster confidence. Wharf is a blue chip conglomerate with a storied history. Founded in 1886, the colonial firm was purchased by the legendary Hong Kong tycoon YK Pao in 1977. Pao died in 1991 and it is now run by his son-in-law, Peter Woo.
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