Pacific Alliance China Land has announced that its jv partner, China Resources, has agreed with Wal-Mart China Holdings that it will sell Wal-Mart the remainder of its interest in Project Malls for RMB248m (US$38.9m).
50% of the consideration will be released to China Resources from escrow with the state owned exchange within 10 business days after the relevant approval is granted by the PRC Ministry of Commerce; and the remaining 50% of the consideration will be released to China Resources within 5 working days after the transfer is registered with State Administration for Industry and Commerce.
The sale proceeds will be repatriated through a dividend distribution and return of share capital which is subject to statutory audit and tax clearance and should take approximately 6 to 12 months to be finalised.
The sale will result in a net IRR of 16% and a net cash multiple of 5.8x on the PACL’s initial investment. The sale proceeds represent a 16% discount to PACL’s Q3 valuation, which the Manager considers a close approximation of fair market value given PACL!|s minority interest and auction was a government sanctioned open process.
Once repatriated, the proceeds from the Wal-mart shares sale, together with the proceeds of the Shanghai Land sale, will be distributed to shareholders through a mandatory share repurchase, or another method to be determined by the Board.
PACL : Pacific Alliance China Land agrees Wal-Mart deal