CITIC Group chairman Chang Zhenming said the sale of its main operating unit to CITIC Pacific Ltd. (00267.HK) is unrelated to any maturing debt of the parent company, the Hong Kong Economic Journal reported Wednesday.
Chang, 57, said CITIC Group has a low gearing ratio, with debt of about 60 billion yuan (US$9.65 billion) against a net asset value of 227 billion yuan.
Earlier, CITIC Pacific said it had agreed to buy its parent’s assets for 226.93 billion yuan in cash and new shares.
The assets include banks, securities and trust companies, car dealerships, satellite services, tunnel operations, real estate and engineering projects.
CITIC Pacific will pay 49.92 billion yuan in cash and issue 177.01 billion yuan worth of shares to CITIC Group. It will also sell another 4.66 billion shares to institutional investors to comply with a Hong Kong stock exchange requirement for a minimum 25 percent free float, the report said.
CITIC Pacific Ltd. will be renamed to CITIC Ltd. and its headquarters will remain in Beijing.
– Contact HKEJ at [email protected]