CITIC Goldstone backs $285m Chinese mining acquisition

According to a regulatory filing, Shanghai-listed Hubei Wuchangyu will buy 414 million shares in Qianjin Mining at RMB4.21 apiece. This is the company's second attempt at acquiring Qianjin. Earlier this year it offered RMB2.1 billon but Chinese regulators refused to approve the deal.

To finance the transaction, Hubei Wuchangyu plans to raise up to RMB580 million through a private placement. The company is offering 138 million shares to six investors, including Goldstone, at RMB4.21 apiece. Goldstone's investment will be made from its CITIC M&A Fund, which launched last year.

Founded in 1999, Hubei Wuchangyu produces and distributes fish and other aquatic products, vegetables and meat. Explaining its investment decision, the company said the agribusiness profitability is decreasing in China, while mining is expected to grow.

Goldstone was incorporated in October 2007 with RMB5.2 billion of registered capital. Last week, the PE firm bought 11 stores owned by Suning Commerce Group, China's leading home appliance retailer, for RMB4.01 billion. It will capitalize the underlying assets to set up a private equity fund.

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• Topics
• Greater China
• PIPEs
• China
• Agriculture
• PIPE
• CITIC Securities
• Goldstone Investment