Gemdale’s RMB8.5b share offering blocked

Real estate developer and solution provider Gemdale Corporation (600383.SH) announced Monday that its planned US$1.24 billion (RMB8.5 billion) additional share offering was rejected by the securities regulator, the Oriental Morning Post reported. The Shenzhen-based property firm raised RMB18 billion through issuing 360 million A shares in August 2007 and lodged a second share offering application with the securities regulator in September. Market watchers say the rejection was due to the frequency of the company’s fundraising efforts and the regulator’s caution against companies financing through boosting equity. The setback is expected to dampen Gemdale’s expansion plans but will not have a significant impact on its financial position. It has also been reported that the developer is seeking to cooperate with UBS (UBS.NY) to raise between US$300 million and US$500 million from global investors. Gemdale’s financial statements show its liabilities include US$862.99 million (RMB5.9 billion) in accounts payable and US$321.79 million (RMB2.2 billion) in bank loans. It earned US$726.96 million (RMB4.97 billion) in revenue in the first half of the year, up 5.29% year-on-year, from 476,000 square meters of properties sold, down 11.97% year-on-year.