Pacific Century Premium Developments Ltd. (PCPD, 00432.HK) and PCCW Ltd. (00008.HK) said in a joint regulatory filing Tuesday that they have agreed to sell their equity interests in Beijing’s Pacific Century Place to a unit of Gaw Capital Partners, a real estate private-equity fund, for US$928 million.
PCPD’s directors see the sale, which comes as the global economy has shown signs of stabilization and gradual recovery, as a good opportunity to realize gains for the benefit of shareholders. They believe the company’s overall financial health will improve with the transaction.
The developer intends to use the sale proceeds to repay loans worth about HK$1.5 billion (US$193.44 million) and for working capital.
According to the agreement, which still needs shareholders’ approval, the sale must be completed by August 28. If the deal is not closed, PCPD will have to pay Gaw Capital a termination fee of US$100 million.
An Apple Daily report said on Wednesday that PCPD, which is expected to gain about HK$2.64 billion before taxes from the deal, has no plan to pay special dividend to shareholders. PCCW, which owns 75 percent stake in PCPD, is expected to gain about HK$2.66 billion.
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