Chinese developer Sunac sells stake in Harbin Ice and Snow World Park for US$138 million

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The divestment comes amid Sunac’s efforts to restructure about US$2 billion in onshore debt

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Sunac China Holdings’ latest divestment shows it continues to make progress in managing its debt load. Photo: Shutterstock

Yuke Xiein Beijing

Published: 1:09pm, 30 Nov 2024

Beleaguered property developer Sunac China Holdings has sold its stake in Harbin Ice and Snow World Park, operator of one of the world’s largest winter-themed parks, for 1 billion yuan (US$138.1 million), marking the company’s latest effort to manage its debt burden and repay creditors.

Sunac’s wholly-owned subsidiary, Harbin Sunac Culture & Tourism Industry, sold its 46.7 per cent equity interest in the theme park operator to Harbin Sun Island Group, which previously owned a 52.8 per cent stake in the target firm, the Beijing-based property developer said in a stock exchange filing late on Friday.

The Sunac unit will allocate 202.6 million yuan from the proceeds of the sale to repay Snow World, according to the filing. An additional 404 million yuan will be used to settle the pledged loan tied to its equity interest in that company.

The remaining 404.6 million yuan will be deposited into a government-regulated special account to “guarantee the delivery of properties in [Sunac’s] property development projects in Harbin”, the filing said.

A bird’s-eye view of tourists visiting the Harbin Ice and Snow World theme park in Harbin, capital of northeast Heilongjiang province, on December 18, 2023. Photo: Xinhua

The divestment by Sunac reflects how China’s property developers remain mired in a deep liquidity crisis since a nationwide campaign called the “three red lines” was implemented in 2020 to contain debt in the housing sector.

The three red lines define thresholds on borrowings, which were outlined by the central government in August 2020. Home prices across the country have now fallen by 30 per cent, compared to their peak three years ago.