Singapore Exchange-listed Jardine Strategic is buying a 20 per cent stake in a Chinese motor dealership group for US$731 million (S$932.4 million).
It announced on Monday that it will invest in Hong Kong-listed Zhongsheng Group Holdings through an equity stake and convertible bonds. Jardine Strategic will buy 12.5 percent of new shares in Zhongsheng for US$332 million.
Zhongsheng is one of mainland China's leading motor dealership groups operating over 170 outlets in over 60 cities across 15 provinces and regions. It carries over 15 major marques in the mid-to-high-end segment, including Mercedes-Benz, Audi, Lexus and Porsche. Jardine Strategic director Adam Keswick said: "This long-term strategic investment provides us with a greater exposure to the mainland market in a sector we understand well and in which we feel Zhongsheng has the potential for substantial growth."
Jardine Strategic will also subscribe for an equivalent of US$399 million of convertible bonds, which are exercisable within three years, for a further 12.5 per cent of the existing share capital of Zhongsheng.
After fully exercising the convertible bonds, Jardine Strategic will have an interest of some 20 per cent of the then issued share capital of Zhongsheng.
Jardine Strategic said the investment will be financed through its existing cash resources.
The shares are listed in Hong Kong.