China's first industry investment fund, Bohai Industrial Investment Fund, is expected to make its debut investment 10 months after inauguration. The target is the Tianjin Pipe (Group) Cooperation (TPCO), the largest oil line pipe manufacturer in China.
Recently, a foreign news agency reported that the Bohai Industrial Investment Fund would acquire less than 20 percent of TPCO's shares at the price of 1.5 billion Yuan. According to reliable resources, however, both the proportion and the final price have not yet been fixed. Details are yet to be released.
Inaugurated at the end of 2006, the Bohai Industrial Investment Fund boasts 6.08 billion yuan for its first phase investments. A company insider told Caijing magazine that the fund has maintained close contact with TPCO ever since its investment committee was established in April 2007. "TPCO is the most ideal investment target in Tianjin. The Bohai Industrial Investment Fund will take action soon."
A company insider revealed that the Bohai Industrial Investment Fund would hold the shares for a long time.
With regard to the deal, authoritative sources pointed out that local government support is of vital importance to all funds that intend to purchase shares in local companies. The Bohai Industrial Investment Fund has played a significant role in the innovation of Tianjin's financial market. Both the Tianjin Municipal Government and TPCO hold the fund in high esteem. However, all negotiations concerning the price and share proportion are conducted on the principle of fairness. "The government will not intervene."
For more details, please read the full story in Chinese (http://www.caijing.com.cn/newcn/home/headline/2007-10-31/36030.shtml).
(China.org.cn November 1, 2007)