Bain converts GOME bonds to get 10% stake
US buyout firm Bain Capital has converted its RMB1.59 billion ($236 million) of bond shares in troubled Hong Kong-listed investee GOME Electrical Appliances Holdings, the second largest electric retail chain in the PRC, into a 9.98% equity stake, gaining votes for a shareholders’ meeting slated to take place on Sept 28th.
Bain's three seats on the GOME board for their representatives Jonathan Zhu, Ian Andrew Reynolds and Wang Li Hong are being challenged by Huang Guangyu, GOME's billionaire founder, who is currently serving a prison term, but appears to want to control the destiny of the company from behind bars. The matter will be voted on at the meeting.
The issue rose to a head when when two unidentified shareholders, who together own 31.6% of GOME voted to remove Bain’s three nominated directors at an annual shareholders meeting held on May 11th. However, these were immediately reappointed by the current GOME board.
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