ALSO READChina's Wanda steps back from theme park, hotel drive with $9.3 billion Sunac deal Asian stocks at 18-month highs as China rises Brisk trade marks start of China, Hong Kong Bond Connect scheme China, Hong Kong launch long-awaited bond connect scheme Brisk trade marks launch of China, Hong Kong bond connect scheme
HONG KONG (Reuters) - Shares of Sunac China Holdings Ltd raced nearly 7 percent on resumption of trade on Tuesday, a day after the acquisitive developer agreed to buy tourism projects and hotels from Chinese property giant Dalian Wanda Group for $9.3 billion.
Sunac's shares, which have more than doubled in value this year, were suspended from trading on Monday ahead of news of the agreement, the second-biggest real estate deal ever in China, according to Reuters data. The companies are expected to sign an agreement by the end of this month.
Shares of Sunac, which has a market value of HK$57.8 billion ($7.40 billion), reversed losses in early trade and gained as much as 6.8 percent to HK$15.8. The Hang Seng Index was up 0.8 percent.
"This cooperation will add a large number of prime land reserves and property assets for the company at a reasonable cost," Sunac said in a statement on Tuesday, citing reasons for the deal.
It said it will continue to discuss and cooperate with Wanda in other projects as well as movies and other areas in future.
After the deal, Wanda will still be responsible for the operation of the properties, and Sunac will pay an annual management consulting fee for 13 theme parks of 50 million yuan each to Wanda for a contract term of 20 years, according to the statement.
The developer has a negative outlook from Moody's, which said in April Sunac's leverage had deteriorated significantly due to large amounts of debt it had raised to support acquisitions.
($1 = 7.8124 Hong Kong dollars)
(Reporting by Donny Kwok, Clare Jim and Anne Marie Roantree; Editing by Stephen Coates & Shri Navaratnam)