The National Development and Reform Commission (NDRC) has given
Blackstone Group the green light to buy into and help restructure
chemicals giant BlueStar.
The NDRC has formerly approved the US company's agreement to pay
$600 million for a 20 percent stake in China National BlueStar
(Group) Corp, the State-owned chemicals maker.
According to a notice on the NDRC website, it has given its
permission for BlueStar to tap Blackstone as a strategic foreign
investor and carry out restructuring.
Blackstone will buy a stake in BlueStar's parent company, China
National Chemical Corp, or ChemChina, which will hold 80 percent of
BlueStar after the deal.
The move is intended to smooth BlueStar's strategic
restructuring, international expansion and public listing in the
future, analysts said.
"Attracting private equity (PE) funds can help BlueStar draw
investment capital and carry out strategic reform", Cheng Lei, an
analyst with Ping An Securities, said.
BlueStar considered several PE funds before choosing Blackstone,
the world's largest PE company. BlueStar will become the US
company's first investment in China.
Blackstone executives Ben Jenkins and former Hong Kong financial
secretary Antony Leung have been appointed by Blackstone to serve
on BlueStar's board, the company said.
"We forecast (they) will bring new ideas to the State-owned
company and help it transform," said Fu Yunfeng, an analyst with
Ping An Securities.
Ren Jianxin, president of ChemChina, said he believes Blackstone
has sufficient investment experience in the chemicals industry
because of its involvement with Celanese and Nalco.
BlueStar is thirsting for global expansion. In 2004, it showed
an interest in buying South Korean Ssangyong Motor Co, but Shanghai
Automotive Industry Corp closed the deal instead.
BlueStar's restructuring follows on the heels of the State-owned
Assets Supervision and Administration Commission's (SASAC) campaign
to strengthen and expand mid-level, State-owned enterprises.
Li Rongrong, minister of SASAC has called on the agency to
create 30 to 50 enterprises by 2010, which can rank among the
world's top three global players in their sectors.
(China Daily January 12, 2008)