On the back of a fully debt funded acquisition of Beilun expressway and a 1.25% convertible bond issue, China Merchant Pacific (CMHP) announces that they will be purchasing a new expressway.
This expressway is newly built and is loss making due to high financing costs. Concession life span at least 21 years.
The acquisition will extend the concession life of portfolio from 13 years to 15 years.
CMHP will be divesting their New Zealand property business to the sellers, in addition to issuing 72.66 mil additional CMHP shares at SGD $0.84 and RMB $75 mil to the sellers.
The placement look to be worth SGD $61 mil/RMB $ 312 mil/HKD $ 387 mil.
Compare to Beilun, which is likely to be purchased for a minimum of RMB $890 mil, this seem to be valuing the New Zealand property business to be less ......