Housing developer China Vanke Co on Sunday signed a strategic cooperation memorandum with Shenzhen Metro Group Co on urban rail-related properties, with several memorandums signed just days before the announcement of a major asset deal.
The two companies also signed memorandums with Chongqing City Transportation Development & Investment Group Co, Dongguan Industrial Investment Holding Group in Dongguan, South China's Guangdong Province, and China Metro Corp on Sunday, according to a statement sent to the Global Times by Vanke.
The involved parties will explore the public-private partnership model in developing urban railways and also explore business opportunities in urban rail-related properties, it said.
Wang Danqing, a partner at Beijing-based consultancy ACG, told the Global Times on Sunday that such cooperation is a win-win as development of urban rail systems may boost the prices of nearby properties.
Meanwhile, by investing in related properties, railway companies, which usually run at a loss, can improve their finances.
The deal has caught media attention not only because of its business potential, but also because Shenzhen Metro has been a key figure in the battle between Vanke's management and its largest shareholder over control of the company.
In December 2015, Shenzhen-based private developer Baoneng Group replaced State-owned China Resources Co as Vanke's largest shareholder, but Vanke's management, including company founder Wang Shi, was opposed to the change, according to media reports.
On December 18, 2015, Vanke suspended the trading of its shares on the Hong Kong and Shenzhen stock exchanges, pending an asset restructuring.
Media reports said that Vanke had held talks with several large enterprises, aiming to take back control from Baoneng by introducing new investors, but without any results.
On March 13, new changes took place as Vanke signed a memorandum with Shenzhen Metro.
Vanke said it planned to buy assets from Shenzhen Metro in a deal that could be worth 40 billion yuan ($6.1 billion) to 60 billion yuan and in return, Vanke would issue new shares to Shenzhen Metro as payment.
A report by the 21st Century Business Herald newspaper on Sunday said that Vanke is expected to announce its restructuring plan with Shenzhen Metro as early as this week.
