Hony to re-up in China’s Jinjiang International

Shanghai-listed Jinjiang International said in a filing that it plans to issue 151 million new shares to five investors, raising a total of RMB4.52 billion via a private placement. Each share is priced at RMB29.23.

Parent company Jingjiang Hotel Group will acquire 76 million shares, while Hony, which is already an investor in Jinjiang, will subscribe to 20 million shares. The National Investment Fund, China Great Wall Asset Management (CWAM) and Hua An Asset Management will each subscribe 15 million shares. Moreover, state-owned Shanghai International Group has agreed to buy 10 million shares worth RMB299 million.

Following the transaction, Hony's ownership in Jinjiang will increase to 12.56%. The National Investment Fund, CWAM, Hua An will each hold 1.57%, while Shanghai International will have 1.05%.

Jinjiang, which trades in Hong Kong and mainland China, has more than 1,700 hotels in 11 countries. In August 2014, Hony paid RMB15 billion for a 12.43% stake in Shanghai Jinjiang International, becoming the largest institutional shareholder. A few months later, Jinjiang agreed to buy Louvre Hotels, Europe's second-largest hotel group, from Starwood Capital. The acquisition allowed Jinjiang to gain more than 1,100 hotels in over 40 countries.

In September of last year, Jinjiang announced it would buy Chinese budget hotel operator 7 Days Group, which was delisted from the US in 2013. The $1.3 billion deal facilitated an exit for several PE backers, including The Carlyle Group, Actis Capital, Sequoia Capital and GIC Private.

The proceeds of the private placement - which still requires regulatory approval - will be used to pay down debt, the company said.

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• Topics
• Greater China
• Consumer
• PIPEs
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• China
• Hony Capital
• PIPE
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