KKR completes exit from China's Rundong Auto with $51m sale

The private equity firm offloaded 112 million shares via a public market sell-down at an average price of HK$3.53 apiece, according to a filing. This follows the sale of 168 million convertible preference shares (CPS) last year to Peng Yang, Rundong’s founder, for HK$592.6 million, which reduced KKR’s voting interest in the company from 17.4% to 7%.

That transaction also saw Yang acquire property developer Greenland Holding Group’s entire stake, triggering a mandatory buyout offer for the entire company. Following the offer, Yang’s interest in Rundong rose from approximately 64.4% to 68.1%, assuming no CPS are converted into ordinary shares. He then reduced his holding to meet requirements for a public float of at least 25% of ordinary shares.

Between 2010 and 2011, KKR's China growth fund participated in four funding rounds for Rundong for a total of $100 million. The company subsequently raised $124 million in its IPO. In 2015, Greenland bought a 30% interest in Rundong for HK$1.55 billion, prompting the company to be renamed China Greenland Rundong Auto. Earlier this year Greenland was dropped from the name.

Founded in 1998, Rundong Auto targets the luxury car market. It operated 70 dealerships as of December 2016, most of them for luxury and ultra-luxury brands such as Maserati and Ferrari, BMW and Mini, Jaguar and Land Rover, Audi, Cadillac, Lexus and Chrysler. The company cleared 70,673 units last year, of which 31,193 were luxury and ultra-luxury brand vehicles.

Revenue for the year reached RMB17.9 billion ($2.59 billion), up from RMB14.9 billion in 2015, while net profit rose from RMB208.9 million to RMB281.4 million.

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• Topics
• Greater China
• Consumer
• Open market
• China
• automobiles
• KKR
• Exit