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In the News

Wuhan, China¡¯s 14th largest airport, investing USD2.3bn to expand airport

Wuhan Tianhe International Airport, the largest airport in Central China, has ambitious growth plans, with plans to invest USD2.3 billion to construct a third terminal building and runway. Wuhan Airport is also developing itself into an integrated transport hub and is focused on expanding its international network, amid an increasing threat from high speed rail on domestic services. Key to this, Air France has announced plans to launch direct services from Paris CDG to Wuhan in Apr-2012.

Wuhan is a player in the battle emerging between airports serving the inland powerhouse Chinese cities including Chengdu, Xi'an, Chongqing and Kunming, for the role as the nation¡¯s fourth largest aviation hub, after Beijing, Shanghai and Guangzhou. Wuhan Airport is, however, trailing its inland peers in terms of growth rates, as the airport feels the impact of the opening of the Wuhan-Guangzhou high speed rail line in late Dec-2009.

web link: http://www.centreforaviation.com/analysis/wuhan-chinas-14th-largest-airport-investing-usd27bill-to-expand-airport-63634

China HGS Continues to Expand in Shaanxi Province With $12.43 Million Land Purchase in Fast Growing Yang County

HANZHONG, China, Nov. 29, 2011 -- /PRNewswire-Asia-FirstCall/ -- China HGS Real Estate Inc. (NASDAQ: HGSH) ("China HGS" or "the Company"), the leading residential and commercial property developer in China's southern Shaanxi province, today announced the Company is continuing to expand in Shaanxi Province with two new construction parcels totaling 90,776 square meters (980,380 square feet) it has acquired for $12.43 million in downtown Yang County, a fast growing city near Hanzhong. It anticipates constructing mainly a residential development with gross floor area of up to 1.9 million square feet, with ground breaking expected in 2012.

The Company said it successfully acquired the development and use rights for the two properties from Hanzhong Yang County Land and Resources Reserve Bureau. The larger 69,913 square meter parcel (approximately 755,060 square feet), was acquired for RMB 60,825,000 (approximately $9.65 million), which is approximately $138 per square meter or $12.80 per square foot. The 20,863 square meter parcel (225,320 square feet) was acquired for RMB 870 per square meter, or approximately $133 per square meter, or $12.30 per square foot.

Under the purchase agreement, China HGS is required to make a 60% payment on the land and applicable taxes by December 2, 2011, with the remainder to be paid by January 20, 2012. The Company believes it can finance the payments from cash reserves, but may borrow all or part of the payments at its discretion. Under the terms of the land purchase agreement, the Company is authorized to develop residential real estate projects on each parcel at a plot ratio of up to 1.95 (the plot ratio is the total gross floor area (GFA) divided by the actual land area). China HGS will therefore be allowed to develop residential properties with GFA of up to approximately 1.9 million square feet

"With the continuing strong demand we see ahead for residential sales in the southern Shaanxi region, we expect to expand our market leadership there with this high quality land resource, while also expanding our footprint outside the region in other third and fourth tier cities where population growth continues to be spurred by the government," stated Mr. Xiaojun Zhu, CEO of China HGS Real Estate, Inc. "We expect to complete the project planning, design, and approvals for this new project in the near future and break ground in 2012. We fully anticipate this project will make an important contribution to our business going forward and we will provide more detailed updates as we progress."

About China HGS Real Estate Inc.

China HGS Real Estate Inc., through its wholly owned subsidiary, Shaanxi Guangsha Investment and Development Group Co., Ltd., has specialized since 1995 in real estate development in China's third-tier and fourth-tier cities. The Company's real estate properties include multi-layer, sub-high-rise, and high-rise apartment buildings. The Company possesses the national Grade-I real estate qualification and was ranked as the No. 1 property developer in Hanzhong, Shaanxi Province in terms of market share in 2007, 2008, 2009, and 2010 successively.

Forward-looking Statements:

This press release contains certain statements that may include 'forward-looking statements'. All statements other than statements of historical fact included herein are 'forward-looking statements'. These forward looking statements are often identified by the use of forward-looking terminology such as 'believes,' 'expects' or similar expressions, involve known and unknown risks and uncertainties. Although the Company believes that the expectations reflected in these forward-looking statements are reasonable, they do involve assumptions, risks and uncertainties, and these expectations may prove to be incorrect. You should not place undue reliance on these forward-looking statements, which speak only as of the date of this press release. The Company's actual results could differ materially from those anticipated in these forward-looking statements as a result of a variety of factors, including those discussed in the Company's periodic reports that are filed with the Securities and Exchange Commission and available on its website http://www.sec.gov. All forward-looking statements attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by these factors. Other than as required under the securities laws, the Company does not assume a duty to update these forward-looking statements.

Web link: http://www.sacbee.com/2011/11/29/4086408/china-hgs-continues-to-expand.html

China loans Kenya Sh16.9bn to build Southern by-pass

State-owned Exim Bank of China signed a Sh16.9 billion loan agreement to finance construction of the southern by-pass road project, adding to the long list of Chinese funded projects.

The Ministry of Finance Tuesday signed a preferential credit loan agreement with the lender for the road that is expected to run from St James Hospital on Mombasa Road to Kikuyu, off the Nairobi-Nakuru Highway.

The contract will see the Chinese bank provide up to 85 per cent of the $183.6 million required for the project while the government of Kenya will provide 15 per cent of the funds.

Once the road is completed, it is expected to ease traffic flowing into the city because vehicles travelling from the coast to Naivasha, Nakuru and all the way to Kisumu will be able to take the alternative route without necessarily coming through Nairobi.

City residents living along the road will also access Jomo Kenyatta International Airport by avoiding the traffic on Waiyaki Way and Uhuru Highway.

¡°The credit will be applied for the construction of the planned Nairobi Southern by-pass road project with a view to providing Nairobi City with an essential corridor for fast transit traffic, hence facilitating quick diversion movement of the urban traffic,¡± said Deputy Prime Minister and Minister for Fnance Uhuru Kenyatta.

Mr Kenyatta, who was speaking at the signing ceremony said the project will significantly contribute to the decongestion of the City of Nairobi which is currently experiencing heavy traffic jams due to inadequate roads and contribute to the improvement of Nairobi metropolitan area¡¯s road network.

He said the Chinese government had so far given the country development assistance amounting to Sh58.962 billion.

The Chinese, who are building Thika Road, have been involved in past projects which include Moi Sports Centre, Kasarani, Moi Teaching and Referral Hospital, Rehabilitation and Widening of the JKIA ¨C Uhuru Highway - UNEP Road, Mama Lucy Kibaki Hospital in Nairobi¡¯s Eastlands area and the Kenya Power Distribution System Modernisation Strengthening Project, amongst others.

They are also involved in ongoing projects which include the Nairobi Northern and Eastern by- passes project, Olkaria IV Geothermal Field Production Wells Drilling Project and the Kenyatta University Teaching, Research and Referral Hospital.

Mr Kenyatta said ongoing projects are being implemented through Concessional and the Preferential Buyer Loan Credits from the Export Import Bank of China. The Chinese are also constructing the Nairobi Northern and Eastern bypasses which are 50 and 90 per cent complete.

Mr Kenyatta said the construction of the planned Nairobi Southern by-pass will complete the loop of the three bypasses easing traffic on Nairobi City roads.

Web link: http://www.businessdailyafrica.com/China+loans+Kenya+Sh16+9bn+to+build+Southern+by+pass

Lehman, Lee & Xu is a top-tier Chinese law firm specializing in corporate, commercial, intellectual property, and labor and employment matters. For further information on any issue discussed in this edition of China Finance Lawyers Alert or for all other enquiries, please e-mail us at mail@lehmanlaw.com or visit our website at www.lehmanlaw.com.

© Lehman, Lee & Xu 2011.
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