Hony invests in 10% of Chengtou
Print Edition
Chinese regulators have approved Hony Capital’s 1.8 billion yuan (US$297 million) investment in Shanghai Chengtou Holding, marking a key step forward in Shanghai’s efforts to overhaul its state-owned enterprises sector.
The 10 percent stake made Hony, China’s leading homegrown private equity firm, the second-largest shareholder in Shanghai Chengtou, which is engaged in property development. It also has an environmental protection unit that converts municipal waste to energy.
Shanghai Chengtou shares surged 7.82 percent yesterday to 8 yuan following its announcement late on Tuesday that the stake sale to Hony by Shanghai Chengtou’s state-owned parent has been approved by the Ministry of Commerce.
Bringing in Hony as a strategic investor echoes the city government’s moves in reforming the state-owned assets sector, Jiang Yao, general manager of Shanghai Chengtou Corp, has said.
Shanghai Mayor Yang Xiong said earlier that the government should not be both the referee and athlete.
“The government should confine its role to a shareholder who only oversees the assets and sets strategy and objective in the long term,” he told a meeting attended by city officials and SOE representatives last month.
Hony has been active in the buyout and privatization of SOEs. The Chengtou deal is Hony’s second investment in Shanghai’s SOE revamp, following last year’s investment in SMG Pictures which is affiliated with the Shanghai Media Group.
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