Shenzhen SEZ to buy stake in China South City Holdings for $245m

Shenzhen SEZ Construction and Development Group Co., a unit of the southern Chinese city’s local state asset regulator, has agreed to pay HK$1.91 billion ($245 million) for a 29-percent stake in the struggling Hong Kong-listed developer, China South City Holdings.

The state firm will become the developer’s largest shareholder after the deal.

According to Bloomberg, the investment “looks like a rescue by the state and may be very positive for CSC’s dollar notes,” Andrew Chan, analyst with Bloomberg Intelligence, said. “It seems likely CSC will be able to obtain liquidity from state banks to repay all its outstanding dollar notes and remain a performing credit.”