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October 15, 2009

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Home » Business » Economy

KKR-led body helps firm grow business

AN investor consortium led by United States buyout giant Kohlberg Kravis Roberts & Co announced yesterday that it poured a combined US$160 million into a Chinese financial leasing firm to help it expand business.

Besides KKR, other investors in the consortium include the Government of Singapore Investment Corp, the city-state's sovereign wealth fund, and China International Capital Corp, an investment banking joint venture one-third owned by Wall Street bank Morgan Stanley, according to a joint statement.

After the deal, state-owned Sinochem Group will retain a controlling stake in International Far Eastern Leasing Co, based in Shanghai, China's financial hub.

"We look forward to fully utilizing our financial services industry expertise and global network to support the company as it continues to grow and develop into a world-class financial institution," said David Liu, head of China operations for KKR.

The firm has long-time investment experience in the global financial service sector.

Liu, a Columbia University graduate, joined KKR in 2006 from Morgan Stanley where, as its co-head of Asia private equity business, he led landmark deals, including buying a stake in Ping An Insurance, China's No. 2 life insurer.

The statement did not give any further financial details but a source familiar with the situation said the investor group led by KKR can own about 30 percent of Far Eastern after the firm issued new shares in a private placement and thereby expanded its capital base. Far Eastern and KKR declined to comment.

China has more than 100 small and big financial leasing firms, but only a few are actively operating. Some small firms have held a licence without doing a major lending deal for years.


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