Japan, Thai Firms Invest $10.4b in China’s Citic
World Economy

Japan, Thai Firms Invest $10.4b in China’s Citic

Nice timing. On the day China said its economy is growing faster than expected, two companies from Japan and Thailand made one of their biggest bets on just that.
Charoen Pokphand Group, the first foreign investor in China after Deng Xiaoping opened the economy in 1978, and Japan’s 157-year-old trading house Itochu Corp. agreed to spend $10.4 billion for a stake in state-controlled Citic Ltd, Bloomberg said.
The investment creates opportunities in China’s real estate, infrastructure, environmental and new energy businesses, according to Itochu. As Asia’s biggest economy shifts to more consumer-driven growth, the Japanese and Thai firms are also looking at food and fashion retail.
Charoen’s billionaire owner Dhanin Chearavanont is betting that he’s once again read the runes for change. The Citic deal comes just over a year after Chinese President Xi Jinping said state-owned companies will benefit from private investment, a policy that could usher in the biggest shake-up in government business strategy in three decades.
Citic Group, the state-owned investment corporation, was among the first of China’s state-owned enterprises to open the door to private capital. It sold shares in its Hong Kong-based Citic Ltd. unit to 27 investors including Charoen and Itochu, and sold the subsidiary $37 billion of assets.
The timing of the investment also works for Citic, which earlier today announced an impairment of up to $1.8 billion on its Australian iron ore mine.
Charoen and Itochu, which agreed on a $1.9 billion share swap last year, will sell their jointly held 1 percent of Citic Ltd. and then acquire 10 percent of the company from its parent for HK$34.4 billion ($4.4 billion), according to a Hong Kong exchange filing.
They will also purchase HK$45.9 billion of convertible preferred stock from Citic, which if converted would boost their stake to 20.6 percent. Itochu plans to fund the purchase entirely with debt, which should not significantly change the firm’s leverage, Chief Financial Officer Tadayuki Seki said.


Short URL : http://goo.gl/ceSt7x

You can also read ...

More and more Thai merchants are integrating WeChat Pay and Alipay’s systems to cater to tourists.
The internet has changed the way most people live. Through...
Cambodia’s economic outlook remains positive, but is subject to downside risks.
The IMF Managing Director Christine Lagarde expressed optimism...
More India Bank Frauds Revealed
Over 25,800 fraud cases involving about Rs179 crore ($1.79...
Free trade achieves more good for the planet.
US President Donald Trump’s steel tariffs have brought the...
Qatar Calls to Investigate UAE Bank’s Bogus Deals
Qatar has asked US regulators to investigate the US subsidiary...
Morocco Currency Reform on Right Track
Few weeks after the launch of the gradual dirham float, the...
EU Readies Tax on US Technological Titans
The European Union will next week unveil plans for a digital...
Apparel imports from ASEAN are growing, spurred by low labor costs  in such countries as Vietnam.
Import prices for apparel and daily goods in Japan plunged...