Citic Pacific's big deal gets 10 more backers

Raises $690 million toward $37 billion purchase of parent's assets; investors include Tencent.

Hong Kong-listed Citic Pacific Ltd. has secured US$690 million from 10 new investors, including Internet giant Tencent Holdings Ltd., to help finance its $37 billion acquisition of the assets of its Chinese state-owned parent, Citic Group. 

Shenzhen-listed property firm Oceanwide Holdings Co., Shanghai-listed garments-to-real estate conglomerate Youngor Group Co. and investment firms Trendfield Inc., out of Malaysia, and Kuok Singapore Ltd. are the top four investors, putting up a combined $400 million. Also among the 10 are Chow Tai Fook Nominee Ltd., a private company controlled by Hong Kong tycoon Cheng Yu Tung, hedge fund Och-Ziff Capital Management Group LLC and Sinochem Hong Kong (Group) Co., an overseas investment arm of Sinochem Group. 

Last month Citic Pacific, which is also Chinese state-owned, secured $5.1 billion from 15 other investors, including Singapore state investment firm Temasek Holdings Pte. Ltd. and Japan's Mizuho Bank Ltd. 

These 25 investors have committed to buy a total of $5.79 billion of shares in Citic Pacific, an iron-ore miner, steelmaker and real-estate developer that is taking over its parent's portfolio--including financial-services units such as Citic Securites Co. Ltd. and China Citic Bank. Citic Pacific will fund the rest of the deal by selling shares to one more investor and issuing $29 billion in shares to Citic Group. 

Upon completion of the deal, which will also leave Citic Pacific with a new name--Citic Ltd.--one of China's premier state enterprises will be effectively listed in Hong Kong and so subject to its enhanced regulatory and shareholder scrutiny. 

While China has listed many state-owned companies in Hong Kong, only in a handful of cases--namely those of the country's four biggest banks--has the listing been of the holding company rather than just an offshore unit. 

After it acquires its parents' assets, Citic Pacific said, its pro forma profit for calendar year 2013 will be 48 billion Hong Kong dollars (US$6.2 billion). It earlier posted a net profit for the year of HK$7.6 billion. 

Independent shareholders having approved the deal earlier this month, it is set to be completed by Aug. 29.


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