Explosives and chemicals company AECI (AFE) said on Monday it had reached an agreement with the Hong Kong-listed Shanghai Zendai to sell its surplus property assets in Gauteng for just over R1bn.

The deal‚ which is subject to the fulfillment of conditions precedent‚ comprises the disposal of approximately 1600 hectares of land from AECI and two of its subsidiaries‚ Heartland Properties and AECI Real Estate.

Shanghai Zendai is an investment holding company focused on developing‚ investing in and managing residential and commercial properties mainly in China.

Given the favourable location of the Acquisition Assets, Shanghai Zendai’s intention is to develop the available land for mixed end-uses that include residential, commercial and retail developments.

The Transaction is anticipated to be effective by 31 July 2014. It is anticipated that the remaining Acquisition Assets will be transferred by the AECI Parties to the Zendai Parties within a period of 24 months from the Effective Date.