China Investment Corp will invest A$200 million (US$159 million) in Goodman Group, Australia's largest industrial property trust, to help the company pare down its debt.
Goodman yesterday said CIC, a US$200-billion sovereign wealth fund, will commit A$200 million to a financing facility alongside Macquarie Group Ltd to cut its A$4.1-billion debt.
Macquarie, the largest investment bank in Australia, last month underpinned the initial A$300 million loan facility but it sold down A$15 million of its exposure to facilitate CIC's participation, taking the final facility size to A$485 million.
CIC will receive options on 255 million new shares for A$102 million, which would give it an 8-percent stake in Goodman, behind Macquarie with 11.5 percent, according to media reports.
Goodman wants to pay back A$1.5 billion in the next two and a half years by retaining earnings, reducing development projects, selling properties and through a potential equity raising, Chief Executive Greg Goodman told the media yesterday.
Goodman owns office buildings, warehouses and industrial estates in Europe and the Asia Pacific, as well as manages property investment funds with total assets of A$21.3 billion.
A public relations official at CIC refused to comment on this issue.
CIC has shown interest in several overseas investments, including spending US$1.2 billion buying common shares in Morgan Stanley because it is optimistic about the company's future growth and progress. It will buy 44.7 million shares to raise its stake in the US bank back to 9.86 percent, the size of the original stake it held in 2007.
(Shanghai Daily June 17, 2009)