CITIC Pacific seals US$5.1b deal
Print Edition
CHINA’S CITIC Pacific Ltd has secured US$5.1 billion to help fund the purchase of US$36 billion in assets from its state-owned parent, as strategic investors lined up to give the landmark deal their blessing.
The deal, which is the injection of CITIC Group Corp’s main operating business into the Hong Kong-listed firm, is part of a wide-ranging reform of China’s state-owned enterprises.
The 15 strategic investors funding the deal include a group of Chinese state-backed entities purchasing about US$4.1 billion worth of shares and overseas investors buying around US$1 billion, the company said late on Wednesday.
China’s National Social Security Fund will be the biggest investor, agreeing to buy HK$16.8 billion (US$2.2 billion) of shares. Insurer AIA Group Ltd is buying US$300 million, while sovereign wealth fund Qatar Holding and Singapore’s Temasek Holdings will contribute US$200 million and US$100 million respectively.
Japan’s Tokio Marine Holdings and Mizuho Bank will also give US$100 million each.
CITIC Pacific’s independent financial advisor said the terms and conditions of the deal were “fair and reasonable” and its independent board panel recommended it to shareholders.
Assets being acquired include stakes in several large financial services businesses such as CITIC Bank and CITIC Securities, as well as a holding in CITIC Heavy Industry and others in real estate, natural resources and telecommunications.
Funding for the huge asset purchase will also include a stock issue worth 177.01 billion yuan (US$28.4 billion) by CITIC Pacific to CITIC Group at a price of HK$13.48 per share, on top of the cash portion raised from the strategic investors.
The deal needs to be approved at a shareholders’ meeting on June 3, and is set to be done by August 29.
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