China’s Zoomlion launches $481m industry investment fund

Zoomlion Capital, the company's corporate investment arm, has agreed to invest RMB500 million in the vehicle, known as Shanghai Lulian Junhe Industrial Equity Merger and Acquisition and Investment Fund Partnerships, according to a filing.

Another five investors - Anhui Railway Development Fund, Jiangsu New Yangzi Shipbuilding, Shanghai Yu'en Environmental Technology Fund, Shanghai Changtai Investment, and Shanghai Hede Yongxin II Equity Investment Fund - will each contribute RMB500 million. Chinese real estate developer Greenland Financial Holdings also intends to invest RMB200 million.

The fund will mainly invest in industrial M&A and state-owned enterprise (SOE) reform projects. Zoomlion said the fund will help accelerate the strategic transformation of the company.

Founded in 1992, Zoomlion develops and manufactures equipment in the areas of agricultural, building, energy, environmental, and transport engineering. In 2008, Zoomlion, supported by Hony Capital, Goldman Sachs and Mandarin Capital Management (MCP), bought a 60% stake in an Italian concrete pump manufacturer CompagniaItalianaFormeAcciaio (CIFA) for EUR163 million. The PE investors subsequently fully exited the Zoomlion CIFA subsidiary to the parent company.

In June last year, Zoomlion partnered with MCP to acquire a 75% stake in Ladurner, an Italy-based waste treatment and environment firm, for EUR75 million ($82 million).

The company's appetite for outbound exposure has been driven by falling domestic demand on the back of slower economic growth. Its revenues fell about 19% year-on-year to RMB20.8 billion ($4 billion) in 2015, while net income came to RMB83 million, down from RMB594 million in 2014.

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• Topics
• Greater China
• Fundraising
• Renminbi fund
• Buyout
• Industrials
• China
• M&A
• manufacturing