A wholly foreign-owned commercial factoring platform was recently launched by Shimao Group at Lujiazui, Shanghai. With US$100mln in investment and US$50mln in registered capital, the platform aims to integrate Shimao Group’s upstream and downstream industry chains and relevant financial resources by operating commercial factoring where Shimao Group (the developer and supplier) acts as seller and project contractor as buyer.
A team composed of Shanghai-based partner Qiu Pei, associates Zhao Zhifeng, Wang Tao and Ding Min advised Shimao Group on the structuring of financial control system, business connection and integration of various platforms, launching of sub-platforms and docking solutions for financing new development projects.
The launching of the commercial factoring company, which was sponsored by a real estate developer against the backdrop of tightened regulatory control over the real estate sector, is of innovative importance for the financing of the sector. It is learned that Shimao Group would also launch and operate financial leasing platforms, real estate funds, debt funds, asset management and micro-credit platforms. Its ultimate goal is to become a financial holding conglomerate with full license for financial services.
Commercial factoring is a process where a factor purchases the invoices and receivables from the sale of goods or services between the supplier and the buyer and provides trade finance and receivables management for the supplier. This business scenario can not only solve the problem of lack of fund and liquidity facing small- and medium-sized enterprises in the real estate industry chain, but more importantly provides a solution to a series of difficulties in financing for the real estate industry.
Shimao Group is a conglomerate international investment group operating businesses in real estate, tourism, hotels, department stores, and export and import. It currently owns two public companies listed in Hong Kong and Shanghai respectively and RMB50bn in equity. It specializes in large-scale, and quality real estate projects, including residential property, hotels, retail and commercial property.
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