COFCO Property (Group) Co Ltd plans to raise up to 5 billion yuan ($768 million) in a private placement of shares to fund new projects and to repay debt. Breaking down the detail, the subsidiary of State-owned China National Cereals, Oils and Foodstuffs Corp will use half the money raised on new housing developments in major cities, and officials said it is already eyeing several high-end sites in Beijing, Shenzhen in Guangdong province and Yantai in Shandong province. The Shenzhen-based property developer will spend 1.07 billion yuan on a 49 percent stake in Beijing-based COFCO Property Investment Co, and 400 million yuan on taking 100 percent control of COFCO Yantai Borui Real Estate Development Co, two of its subsidiaries…Full Article: China Daily Mar 2016

Key Point

  • According to a representative of Shanxi Securities, COFCO is looking to increase profits by investing in real estate in Beijing, Shenzhen, Guangdong, Yantai, Hangzhou, and Nanjing.

ChinaAg Comments

  • COFCO Property, traded on the Shenzhen Stock Exchange (000031), is a subsidiary of the state-owned China National Cereals, Oils and Foodstuffs (COFCO) Corporation.
  • In January 2016, the head of SinoGrain (Zhao Shuanglian) became the new chairman of COFCO Corp as Ning Gaoning was tapped to lead Sinochem Group.
  • In December 2015, COFCO announced it would buy out the remaining 49% of Noble Group’s Noble Agri division.
  • COFCO’s February 2014 investment in Nidera and April 2014 investment in Noble Group was 60% financed by COFCO and 40% by outside investors such as: Hopu Investment Management Co. (Chinese private-equity firm), Temasek Holdings (Singapore state-owned investment firm), Standard Chartered Private Equity and the World Bank’s International Finance Corp.
  • In April 2014, COFCO acquired a 51% stake (estimated at US$1.5 billion) in Noble Group’s Agribusiness Division (trades in grains, oilseeds, sugar, cocoa, cotton, and coffee).
  • In February 2014, COFCO purchased a 51% stake (estimated at US$1.2 billion) in Nidera, a Dutch grain trading company.
  • In March 2013, COFCO announced that it received $4.82 billion in loans from the China Development Bank in order to stabilize food prices and improve productivity.
  • In November 2012, COFCO announced that for the next four years it had approximately US$10 billion to fund overseas mergers and acquisitions.

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