TPG exits China Grand Auto to Haitong-led group for $697m

Haitong Securities-owned Haitong International New Energy has agreed to buy into an offshore vehicle that will invest directly in China Grand Automative Group, which in turns holds a minority interest in CGA's onshore business. Haitong will pay HK$2.1 billion for a 38.87% interest in the vehicle, while the rest of TPG's stake in CGA will be acquired by an undisclosed investor, according to a regulatory filing.

AVCJ Research records show TPG invested up to $100 million in Xinjiang Guanggui Industry Investment's auto trade and service projects in 2006. The intention was to establish 200 "4S" stores - focusing on vehicle sales, spare parts, services and customer surveys - in China between 2006 and 2009.

China Grand Auto was launched later in 2006. The business is a joint venture with Xinjiang Guanghui and operates 402 4S dealerships across 23 provinces. Two years ago, Shanghai Future Value Investment and Shenzhen KCH Investment invested in the company for an undisclosed sum.

The company reportedly appointed banks earlier this year for a Hong Kong IPO that it was hoped would raise at least $500 million. The plan was subsequently scrapped. An earlier IPO attempt is said to have come in 2010.

Haitong International is a Hong Kong-listed subsidiary of Haitong Securities, China's second largest brokerage firm. Last year, TPG sold Chinese financial leasing business UT Capital Group to Haitong International for approximately $715 million. 

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• Topics
• Greater China
• Consumer
• Exits
• China
• Consumer
• Exit
• Trade sale
• TPG Capital
• automobiles