TPG to invest $108.6m in China Xinyuan Real Estate

The proceeds will be used for land acquisition and general corporate purposes to further support the company's development.

The private equity firm will pay $75.8 million for convertible notes maturing in 2018 with an annual cash coupon of 5%, plus $32.9 million worth of common shares at $5.48 per American Depositary Share (ADS). The notes will be convertible to stock at an initial conversion price of $6.00 per ADS, according to a statement.

Upon completion, TPG will hold approximately 20% of the company. It will nominate one non-executive director to Xinyuan's board of directors.

"We are impressed by Xinyuan's solid financial position and experienced management team and look forward to providing our resources and experience to help Xinyuan achieve its strategic objectives," said Steve Sun, partner and managing director at TPG.

Xinyuan primarily focuses on development projects in tier two cities in China, covering Zhengzhou, Jinan, Suzhou, Kunshan, Chengdu and Hefei. Last year, the company launched its overseas arm, XIN Development Group International, to operate in the US market.

Founded in 1992, TPG oversees $55.3 billion in assets globally. In China, it has made investments in China Grand Auto, China International Capital Corporation, Daphne, Lenovo, Ping An Bank, previously known as Shenzhen Development Bank, Wumart, Li Ning and HCP Holdings.

Several private equity firms have been active in China's real estate space recently.

Last week, The Blackstone Group offered to buy Hong Kong-listed real estate developer Tysan Holdings for approximately HK$2.5 billion ($322.5 million). In July, Century Bridge Capital invested $44.4 million in a joint venture with Coastal Greenland for the development of a residential project in Wuhan, Hubei province.

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• Topics
• Greater China
• Real estate
• PIPEs
• China
• TPG Capital
• Real estate
• PIPE