Greentown yet to approve Sunac venture disposal plan

Greentown China Holdings Ltd said it has not approved Sunac China Holdings Ltd's 15.5 billion yuan ($2.5 billion) purchase of assets in a joint venture, the latest development in a dispute between the two Chinese developers.

The board of Greentown, based in Hangzhou in Zhejiang province, is still in the process of evaluating the terms of the disposal, the firm said on Monday in a Hong Kong stock exchange filing.

Sunac, based in Tianjin, said on Dec 31 it would buy Sunac Greentown's equity interest in a venture with stakes in 15 projects across Chinese cities including Shanghai, Wuxi and Suzhou. This comes after Greentown, led by chairman Song Weiping, sold a 24.3 percent stake to China Communications Construction Group last month. The deal terminated an agreement to sell a same-sized stake to Sunac after Song said he thought the companies "don't blend".

"It seems like execution of the transaction is facing some difficulty," said Johnson Hu, Hong Kong-based property analyst at CIMB Securities Research. "Assets in the joint venture are very important for both companies. Keeping the status quo will be acceptable to the market."

The board of Greentown, at a Dec 25 meeting, only decided to set up a committee and hire an agency to evaluate whether the developer should sell the assets, an executive who attended the meeting said in a phone interview on Friday.

"The unilateral actions taken by Sunac China without the requisite approvals and consents are unacceptable to the company," Greentown said in a statement on Monday.