Citic Pacific unveils star backing for landmark deal
Conglomerate says 15 government funds and institutional investors will subscribe for shares to help pay for parent company's injection
Citic Pacific has reached agreement with 15 government funds and leading institutional investors to subscribe for HK$39.5 billion of shares it will issue to finance the acquisition of its parent company's assets, which is billed as a landmark deal that will help advance state enterprise reform on the mainland.
About HK$16.8 billion, or 42.5 per cent, of the shares had been taken up by the mainland's largest pension fund, the National Social Security Fund, the steel-to-property conglomerate said.
Safe Investment, the Hong Kong fund management unit of the State Administration of Foreign Exchange, has agreed to buy HK$4.65 billion of the shares, while Qatar Holding will subscribe for HK$1.56 billion worth and Singapore's Temasek will acquire a HK$780 million stake. Qatar Holding and Temasek are sovereign funds.
The biggest commercial purchases are HK$3.9 billion from China Life Insurance and HK$2.3 billion from insurance giant AIA.
There is also a HK$1.95 billion investment from Bank of China, HK$1.56 billion from Agricultural Bank of China, and HK$1.17 billion each from China Construction Bank and Industrial and Commercial Bank of China.
Other investors include Taiwanese insurers CTBC Life Insurance and Fubon Life Insurance, Japan's Tokio Marine & Nichido Fire Insurance and Mizuho Bank, and state-owned Beijing Infrastructure Investment.
Despite the 227 billion yuan price tag and lack of a discount to the book value of assets being bought by Citic Pacific, Somerley Capital, the independent financial adviser to the company's minority shareholders, said it was "fair and reasonable" after reviewing a report by independent valuer China Enterprise Appraisals.
