China PE investor buys Ports
In this article (5)
Chinese language personal fairness firm Oriental Fortune has agreed to buy a 20 per cent stake in Hong Kong listed Ports HK.
Ports HK is the subsidiary of Ports BVI which owns considerably all the group’s present trend and attire enterprise and is looking for to exit the attire and style enterprise.
A Framework Settlement signed by each events offers for Oriental Fortune to introduce an unbiased third celebration purchaser to accumulate the remaining 80 per cent 90 days after the primary deal is settled.
The 20 per cent stake will carry a money worth of HK$600 million (US$77.35 million).
Ports plans to make use of the proceeds from the 20 per cent sale for funding in “associated sectors of the PRC financial system”.
At this stage, no legally binding settlement has been reached relating to acquisitions, and Ports BVI says it’ll make additional bulletins referring to reinvestment later.
Ports BVI is at present managed by personal fairness group Blackstone, CFS and PIEL who, mixed, maintain 79.three per cent, and have agreed to the sale.
The seller says administration think about the longer term prospects of the normal style and attire enterprise are “troublesome and difficult”, mirrored within the downward development within the firm’s monetary efficiency over the previous few years.
“The downward development has been brought on by numerous elements, together with shoppers’ transfer from conventional retailing to web purchases and the macro political surroundings within the PRC,” Ports BVI stated.
The corporate says shareholders’ pursuits can be higher served by the corporate reinvesting in different areas of the PRC financial system which give shareholders with a greater return.
Questions & Answers
Q.What specifically will Ports BVI do with the HK$600 million raised from the 20 per cent sale?
What specifically will Ports BVI do with the HK$600 million raised from the 20 per cent sale?
Ports BVI plans to use these proceeds for investment in 'related sectors of the PRC economy'. Further announcements regarding the specific reinvestments will be made later.
Q.Who controls Ports BVI, and have they approved this sale?
Who controls Ports BVI, and have they approved this sale?
Ports BVI is currently controlled by the private equity groups Blackstone, CFS, and PIEL. These groups, who collectively hold 79.3 per cent, have agreed to the sale.
Q.What reasons has Ports BVI given for wanting to exit the fashion and apparel business?
What reasons has Ports BVI given for wanting to exit the fashion and apparel business?
Management believes the traditional fashion and apparel business faces a difficult future. This is due to consumers moving to internet purchases and the macro political environment in the PRC, affecting financial performance.
Q.What is the role of Oriental Fortune in the acquisition of Ports HK?
What is the role of Oriental Fortune in the acquisition of Ports HK?
Oriental Fortune has agreed to buy a 20 per cent stake initially. A framework agreement also states they will introduce an independent third party to buy the remaining 80 per cent within 90 days after the first deal settles.
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