Basic HTML Version
Glorious Property
132
Annual Report 2011
Notes to the Consolidated Financial Statements
(Continued)
31 December 2011
20 Borrowings
(Continued)
(a) The Group entered into a sale and purchase agreement and a set of supplemental agreements (collectively, the
“Agreements”) with S.I. Properties Holdings Limited (“S.I. Properties”), a wholly-owned subsidiary of Shanghai
Industrial Holdings Limited which is listed on the Hong Kong Stock Exchange, on 11 June 2009 and 16 December
2009 respectively, regarding the transfer of the entire equity interest in its wholly-owned subsidiary, Better Score
Limited (“Better Score”), to S.I. Properties at a total consideration of RMB2,000,000,000 (the “Shanghai Bay
Arrangement”). The Shanghai Bay Arrangement had been completed in 2009 upon fulfillment of certain conditions as
set out in the Agreements, mainly associated with the transfer to Blocks Nos. 2 and 8 of Shanghai Bay to Shanghai
Penghui, the indirect wholly-owned subsidiary of Better Score and the pledge of 30% equity interest in Shanghai
Xintai Property Development Co., Ltd., an indirectly wholly-owned subsidiary of the Company, in favour of S.I.
Properties. Considering all the terms of the Agreements, the Shanghai Bay Arrangement, in substance, is a loan
arrangement in accordance with the HKFRSs and therefore the consideration of RMB2,000,000,000 received is
regarded as a financial liability and measured at amortised cost using the effective interest method.
On 29 July 2011, the Group entered into a supplemental agreement with S.I. Properties, pursuant to which Bright
New Investments Limited, the directly wholly-owned subsidiary of the Company, has agreed to acquire from S.I.
Properties the entire issued share capital of Better Score and the shareholder’s loans owed by Better Score to S.I.
Properties at a total consideration of RMB2,000,000,000. This supplemental agreement provided the Group an
alternative mechanism to unwind the Shanghai Bay Arrangement outside the PRC. On 1 December 2011, the
Group has completed the acquisition of the entire issued share capital of Better Score.
(b) Bank borrowings include loans from commercial banks and other financial institutions. These borrowings are
secured by the construction in progress, investment properties, properties under development, completed projects
held for sale, restricted cash and equity interests of certain subsidiaries of the Group. As at 31 December 2011,
the carrying value of the borrowing related to the loan arrangement with Jiangsu Trust as set out in note 11(a) was
RMB1,324,329,000 (2010: RMB1,165,316,000).
(c) On 25 October 2010, the Company issued 13.0% senior notes due 2015 with an aggregated nominal value of
US$300,000,000 (equivalent to RMB1,974,000,000) at par value (the “Senior Notes due 2015”). The interest
is payable semi-annually in arrears. The net proceeds, after deducting the direct issuance costs, amounted to
approximately US$292,805,673 (equivalent to RMB1,926,661,328). The Senior Notes due 2015 will mature on 25
October 2015. The Company, at its option, can redeem the Senior Notes due 2015 (i) in whole, or in part, on or
after 25 October 2013 at the redemption price equal to 106.50% before 25 October 2014 and 103.25% thereafter
of the principal amount plus accrued and unpaid interest and (ii) in whole but not in part, prior to 25 October 2013
at redemption price equal to 100% of the principal amount plus a premium and accrued and unpaid interest. The
Senior Notes due 2015 are secured by the shares of the Group’s subsidiaries which are incorporated outside the
PRC and are listed on the Singapore Exchange Securities Trading Limited.