By Esther Fung
SHANGHAI--Chinese property developer Evergrande Real Estate
Group Ltd (3333.HK) said it plans to invest a total of HK$1.2
billion ($154 million) in a U.S. solar company and another Hong
Kong-listed firm, in yet another move to diversify from the
sluggish housing market.
The Guangzhou-based developer plans to invest US$30 million, or
a 3.95% stake, in San Francisco-based SPI Solar, a photovoltaic
solar developer, Evergrande said in a stock exchange announcement
late Tuesday.
Evergrande also plans to buy 30.81 billion shares at HK$0.03135
each in another Hong Kong-listed firm Guocang Group Ltd. (0559.HK).
This purchase would total around HK$966 million ($125 million) and
represent about 73.59% of the entire issued share capital of
Guocang, a loss-making liquor and wine manufacturer. Meanwhile, the
statement added that SPI Solar would also be buying 7.5 million
shares, or a 17.83% stake, in Guocang. Guocang said it is also
looking to diversify into the solar energy business.
Evergrande said the acquisitions would provide an opportunity
for it to invest in and co-invest with SPI to develop business in
the new energy sector. It also plans to utilize Guocang to gain
access to the capital market.
Evergrande, well-known in China for owning a successful soccer
team, said in August it would spend 10 billion yuan in China's oil,
grain and dairy markets. Last year, it started a new business line
distributing bottled water.
On September 30, Evergrande said in a statement on its website
that it was investing 90 billion yuan ($14.7 billion) in a solar
power plant in Zhangjiakou in north China's Hebei province with an
expected capacity of 9.2 million kilowatts.
In recent months, analysts have raised concerns about
Evergrande's debt levels, noting that it is one of the most highly
leveraged property developer. Citi Research said that Evergrande's
leverage levels, or debt to equity ratio, could be as high as
248%.
Write to Esther Fung at esther.fung@wsj.com
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