SouFun Holdings Ltd (NYSE:SFUN) operator of biggest real estate portal in China and famous as Fang.com, has obtained $400 million-$700 million investment from private-equity entities IDG Capital and Carlyle Group, in support with the company’s CEO Mr. Vincent Mo.
SouFun reported the subscription price of the issued shares is $5.85 per ADS, 2 cents less than where U.S. listed share price closed on Thursday and well below the $19.94 high recorded during real estate boom in China. For IDG Capital, the investment expands the firm stake to 2.8%. The CEO of SouFun said that the Beijing firm, in the midst of a restructuring process, will deploy the capital to expand aggressively to additional cities and extend its reach in existing cities. The company’s sites and apps include real estate listings including almost 400 towns in China.
Property sales in China have recovered due to extensive stimulus measures from Beijing. However, the stock price of SouFun has plunged since mid-June due to existing woes over China A-shares and the condition of the nation’s economy. Over the last few months, the stock has eroded 47% of its market value. The convertible notes will indicate just 50% of the total investment amount. Also, the holders of these ‘Notes’ will be entitled in 7 years to covert the notes to shares at nearly $7.17 a share.
Technology stocks have eroded a major part of their gains recorded over the last few years. The “NASDAQ-100” Technology Sector Index has declined 8.50% so far in this year, primarily due to the recent broader market selloff. In any case, the technology segment continues to top the list of the best performing sectors. SouFun Holdings Ltd (NYSE:SFUN) is one of the stocks that offer some hope to investors in this tough time. York Capital Management initiated a stake in the company during the second quarter.