US private-equity firm Bain Capital will invest 3.2 billion HK dollars (US$412 million) in Chinese retailer GOME Electrical Appliances Holdings Ltd., Shanghai-based Oriental Morning Post reported Monday.
The investment was approved in a boarding meeting held by Gome on June 6, the paper said.
"The Bain investment means the worst time for Gome will be over," a person familiar with the deal told the Shanghai-based newspaper. "The company will work on plans to resume its stock trading."
Bain capital will invest 3.2 billion HK dollars in cash-strapped Gome at a 1.04-1.07 HK dollars per share, a discount to the last trading price of 1.12 HK on November 24 last year when the company suspended its share trading as its former chairman and leading shareholder Huang Guangyu was being investigated as part of an alleged share trading scandal.
Bain and Gome's other shareholders will be entitled to buy the 18 percent new rights issue by Gome. Bain will also subscribe 12 percent of Gome's convertible bonds worth 4.6 billion HK dollars with 552 million HK dollars.
The deal will enable Bain to become the second largest shareholder in Gome with a 14 percent stake. Huang Guangyu remains the largest shareholder with a 30% stake.
Bain will also get a seat in Gome's board. Zhu Jia, a managing director at Bain in charge of the company's Hong Kong team, is reported to take the post, the paper said.
For more details, please read the full Chinese coverage at:
(China.org.cn June 8, 2009)