Sino-Ocean Group Affiliates to Sell Equity Interests, Debt Claims in Beijing Commercial Property Project to JV Partner Ping An Life Insurance for RMB 5B; Sale Expected to Close in June

Sino-Ocean Group affiliate sale to Ping An Life Insurance by Reorg's Asia Core Credit team.

Two affiliates of Chinese property developer Sino-Ocean Group are selling equity interests and debt claims in a jointly developed commercial property project in Fengtai District of Beijing to joint venture partner Ping An Life Insurance for RMB 5.015 billion ($752.3 million), with the sale expected to close in June, according to two sources familiar with the matter.

In an announcement from Ping An about the transaction, the sellers were identified as Wuhu Luoqiu Songyu Investment Center LP and Beijing Yinghui Real Estate Co., but the relationship between the two entities and Sino-Ocean was not disclosed. Both are affiliates of Sino-Ocean Group, according to the sources.

Ping An is acquiring a 34.5% stake in Shenzhen Pingxuan Investment Management Co. from Wuhu Luoqiu for RMB 3.418 billion and is acquiring shareholder loan owed by Beijing Jinkun Lize Real Estate Co. from Beijing Yinghui for RMB 1.597 billion, giving the transaction a total valuation of RMB 5.015 billion. The agreement was entered into on April 29, the announcement shows.

Shenzhen Pingxuan, the project company, owns the financial commercial land use rights of a 12,214 square meter land parcel in the Lize commercial district in Fengtai, Beijing.

In a separate project, Sino-Ocean recently received about RMB 3 billion funds from its largest shareholder, China Life Insurance Co. Ltd., to develop a commercial property complex in Beijing’s Jiuxianqiao commercial area, according to one of the sources and a third source familiar with the matter.

Sino-Ocean and China Life are jointly developing the commercial complex, known as the Yidi Port Phase I, in Jiuxianqiao area in Chaoyang District of Beijing via an asset-light collaboration mode, according to a report from state-owned Securities Daily newspaper.

As of the end of 2019, Yidi Port Phase I had an occupancy rate of 93%, according to Sino-Ocean’s 2021 annual report.

China Life also plans to subscribe to new insurance debt products worth billions of RMB to be issued by Sino-Ocean, with the issuance expected to materialize around the second quarter of 2022, as reported.

Sino-Ocean and Ping An declined to comment.

Below is Sino-Ocean Group’s capital structure: