General Atlantic raises $129m through Zhongsheng sale

In late March, Zhongsheng announced that profit attributable to shareholders came to RMB1.4 billion ($222 million) in 2011, up 30% year-on-year. Revenue nearly doubled to RMB41.9 billion as new car sales surpassed 160,000 units, a 60% gain on the previous year. The company's stock rose more than 20% following the results announcement, closing at HK$16.40 on April 16. It ended morning trading on April 18 at HK15.58.

This is said to be General Atlantic's third sell down of Zhongsheng since the company's $369 million offering in Hong Kong in March 2010. The private equity firm first invested in 2008, taking a 15% stake in Zhongsheng, with the remainder held by Blue Natural, a management-controlled vehicle. General Atlantic injected a further $25 million ahead of the IPO to prevent its stake from being diluted.

As of October 2011, General Atlantic held 8.09% of Zhongsheng, a regulatory filing revealing that the private equity firm had increased its stake from 7.51%. This came shortly after the stock plummeted to a one-year low of HK$9.40.

Based on the size of General Atlantic's most recent sell down, it now holds around 5% of the company.

Although passenger car sales growth in China is slowing, a total of 18.5 million vehicles were sold in 2011, taking total ownership past the 100 million mark. Zhongsheng set up 18 new dealerships during the year, including 10 luxury brand dealerships for the likes of Mercedez-Benz, Audi, Lexus and Volkswagen. It also acquired a further 24 dealerships, taking its coverage to 60 cities.

• Tweet  
• Facebook  
• LinkedIn  
• Google plus  
• Save this article  
• Send to  

• Topics
• Greater China
• Consumer
• Exits
• General Atlantic
• China
• automobiles
• Consumer
• Exit
• Sell down