Six years after entering the Chinese real estate market, Kardan NV (TASE: KRNV;AEX:KARD) is bringing a partner into the business. Kardan Land China Ltd. (formerly GTC China Real Estate) will allot 10% of its shares to an unnamed investor for RMB 333.3 million (€40 million), reflecting company value of €403 million - NIS 2 billion - after money.
Kardan said, "The capital increase, which is in line with Kardan’s strategy to fund its activities at the intermediate or subsidiary levels, will enable Kardan Land to further develop its Chinese real estate operations."
It added that the parties are due to sign a final agreement by the end of the first quarter of 2012, and that the accounting implications of the intended transaction were not yet known.
Kardan entered China in 2005, and is currently building six mixed-use residential and commercial projects, which are in varying stages of completion, in tier 2 and tier 3 cities. Kardan Land owns 50% of some of the projects, which have an aggregate area of 3 million square meters. Kardan Land's assets totaled €488 million at the end of September, and its shareholders' equity was €231 million. Its operations contributed €20 million to Kardan NV's revenue in January-September, including from the sale of half of the Galleria Chengdu mall for €46 million, and a profit of €12 million.
Another Kardan subsidiary, Kardan Technologies Ltd. (TASE:KRTC) is considering entering the oil and gas exploration industry. It is talks with DS Apex Holdings Ltd. (TASE:DSAP) to invest NIS 25 million in Katzir Investments Ltd. (TASE: KZIN) as part of the latter's planned NIS 75 million offering. In September, Katzir and DS Apex signed an agreement to jointly invest in oil and gas exploration.
Kardan's share price fell 0.1% in morning trading on the TASE to NIS 8.71, giving a market cap of NIS 974 million, and was flat in Amsterdam at €1.74.
Published by Globes [online], Israel business news - www.globes-online.com - on December 29, 2011
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