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Shimao to raise funds after Beijing lifts equity refinancing ban

Shimao Group Holdings Ltd 600823 said it would launch a private placement of shares to ease a liquidity crunch, becoming the second Chinese property developer to announce such a move after Beijing permitted the sector to resume equity refinancing.

Developer Hubei Fuxing Science and Technology Co 000926 announced a similar move on Tuesday.

Shimao 813 aims to raise funds from 35 investors by a private placement of shares to "improve capital structure, ease liquidity difficulty and stabilize financial conditions," the developer said in a filing late on Tuesday.

The proceeds would be used to ensure it could hand over properties to buyers and to repay some debts and replenish working capital, it added. Cash-strapped Chinese developers have been unable to complete many homes for customers.

The fund raising target will not exceed 30% of the current capital base, said Shimao, which has a market value of around 10.2 billion yuan ($1.43 billion).

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