Source : The Business Times, August 22, 2008
PROPERTY giant CapitaLand has inked deals to inject four Raffles City-branded integrated developments in China - in Shanghai, Beijing, Chengdu and Hangzhou, into its Raffles City China Fund.
The US$1 billion (S$1.4 billion) real estate private equity fund will be purchasing CapitaLand's effective 55.9 per cent stake in Raffles City Shanghai, and 100 per cent of the other three Raffles City projects under development.
CapitaLand has a 50 per cent stake in the fund.
The property group is expected to receive a total consideration of about US$841 million (S$1.149 billion) which takes into account the agreed value of Raffles City Shanghai at 4.5 billion yuan (S$889 million) and the agreed land values of the other three Raffles City projects.
Net of its 50 per cent stake in the fund, CapitaLand will obtain an eventual net cash flow of about US$420 milllion (S$574 million).
In addition, CapitaLand will realise a total portfolio gain of S$313 million, which includes a net gain of S$183 million from the dilution of its interest in the four Raffles City assets as well as the fair value gain of S$130 million for Raffles City Shanghai.
Besides originating and retaining a sponsor stake in the fund, CapitaLand is also managing the fund and its properties.
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