Warburg Pincus commits $10m to IPO of Chinese property developer


buildings-under-construction-1286619-mUS private equity giant Warburg Pincus has agreed to buy HKD77.5 million (US$10 million) of shares in the Hong Kong IPO of Chinese company Jinmao Investments.

The firm will invest the funds through its wholly owned subsidiary Carnelian Investment as a cornerstone investor, according to Jinmao’s filing with the Hong Kong stock exchange.

The property company plans to offer 600 million share stapled units, which is a share with a unit in a trust related to Jinmao.

About 10 per cent of those will be offered in Hong Kong and the rest internationally, with shares expected to be traded from July 2 for HKD 5.65 ($0.73) each.

Other cornerstone investors for the IPO include Gordon Tan, non-executive director of property developer and real estate company SingHaiyi Group, and Shanghai-listed property firm Shanghai Construction Group.

Those investors will also buy $10m of shares according to the regulatory filing.

Jinmao hopes to raise $393.8m in the float, with the funds going towards various settlements with property development company Franshion.

Nearly one fifth of the funds raised will be paid to Franshion for the settlement of the existing inter-company loans, with the remaining 80 per cent used for partial settlement of the pre-IPO dividend, payable to Franshion.

Franshion develops and operates large-scale and high-end commercial real estate projects in China and a platform enterprise under the real estate segment of the Sinochem Conglomerate, which also owns Jinmao.

The underwriters for the IPO are Deutsche Bank, Morgan Stanley, DBS Asia Capital, the Hong Kong Shanghai Banking Corporation, Standard Chartered, Goldman Sachs and JP Morgan.

Copyright © 2014 AltAssets