BEIJING, Nov 8 (Reuters) - China Fortune Securities, a partner in a securities joint venture with Morgan Stanley , is set for a listing in the mainland China market through an asset injection into property developer Shanghai China Fortune Co.
China Fortune Securities holds a 66.67 percent stake in Morgan Stanley Huaxin Securities, with Morgan Stanley owning the remainder.
In a filing late on Monday, Shanghai China Fortune said it is to acquire a 92 percent stake in China Fortune Securities from three shareholders in the brokerage via an asset swap and issuance of shares for a total value of 4.93 billion yuan ($727 million).
The brokerage and the property developer are both indirectly linked to Shanghai’s state-owned Assets Supervision Commission, which represents the municipal government.
Shanghai China Fortune also said it would raise 1.27 billion yuan in a private placement to three institutional investors to boost its capital.
The listed company will quit real estate development to focus on developing its securities businesses. The company plans to use 800 million yuan of the proceeds from the share issuance to expand China Fortune Securities’ stock market businesses, including margin trading and short selling, according to the filing.
The rest will be used to expand its proprietary trading and asset management units, it said.
China Fortune Securities earned 2.2 billion yuan in revenue in 2015, according to the filing. Its total assets were worth 17.7 billion yuan.
Guotai Junan Securities is the financial adviser for the transaction. ($1 = 6.7789 Chinese yuan renminbi) (Reporting by Shu Zhang and Matthew Miller; Editing by Kenneth Maxwell)