China State Construction Engineering Corp. Signs $1.7 Billion Agreement With Tishman And Casino Builder Revel Entertainment To Complete Atlantic City Casino
Forbes.com reports today that one of the big investment trends of the last decade — western (primarily American) investors pumping money into places like Macau to develop sprawling casinos — has been turned on its head, as China State Construction Engineering Corp. (CSCEC), China’s biggest property company, has just signed a $1.7 billion deal with Tishman and Revel to complete a new casino in Atlantic City by July 2011. This investment may be unusual, but it is both a welcome injection of cash into a delayed project as well as a possible sign of more Chinese-American cooperative deals and construction projects to come. These construction agreements are extremely common in China — as we reported yesterday — but to date have been largely nonexistent in America.
CSCEC has been on a bit of a roll lately, having benefitted greatly from China’s massive stimulus spending, and will provide the much-needed funding that this project needs to finally get moving again — construction had been halted in the wake of the global financial crisis. As Forbes.com notes, CSCEC
reported a net profit of 2.35 billion yuan ($344 million) for the first half of 2009 on 111.3 billion yuan ($16.3 billion) in revenue.
In late July, CSCEC raised more than 50 billion yuan ($7.3 billion) from investors during the company’s initial public offering on the Shanghai exchange. The company’s new listing was the world’s biggest IPO since Visa raised $19 billion 16 months earlier.
The value of CSCEC soared to more than 40 times earnings on its first day of trading as shares surged more than 65% to close at 6.91 yuan ($1.01). The company’s stock is currently trading at 5.29 yuan (77 cents).