Chinese property developers Country Garden and Midea Real Estate secured separate mergers and acquisition (M&A) financing facilities worth 21 billion yuan ($3.3 billion) in total, sending their shares sharply higher in Hong Kong.
The financing accords, both with state-backed China Merchants Bank, comes as Beijing steps up efforts to stabilise and tighten control over the property sector, accounting for a quarter of its economy, which has been roiled by the debt crisis at heavyweight developer Evergrande.
In separate statements late on Thursday, Country Garden said it had signed a deal for 15 billion yuan ($2.37 billion) in M&A facilities with China Merchants, while Midea said it had agreed a deal with the same lender for 6 billion yuan in M&A funds.
Shares of Country Garden jumped 8% on Friday morning, while Midea climbed as much as 5.6%, versus a 2.3% fall in the benchmark Hang Seng Index .HSI.
Under Beijing’s close watch, large and state-owned property firms are expected to acquire more assets from cash-strapped private developers.
Country Garden, the nation’s top developer by sales, said in its official WeChat social media account late on Thursday the facility will help it better seize merger and acquisition opportunities.
Midea, a smaller rival also based in the southern Guangdong province, said it also secured a 6 billion yuan facility from the bank for personal mortgage loans for its clients.
Separately, Country Garden said in a filing on Thursday it has further repurchased a total of $6 million of 4.75% dollar bond due January 2023.
It also said earlier this week its registration to issue 5 billion yuan onshore medium-term notes have been accepted by regulators.
- Reuters with additional editing by Sean OMeara