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Goldman Sach Buys Into Chinese Auto Glass Maker
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Goldman Sachs Group plans to buy 10 percent of Fuyao Group Glass Industries, the biggest maker of automotive glass in China, for 890 million yuan, or $113 million, Fuyao said Monday.
Goldman's GS Capital Partners V fund plans to buy 111.28 million shares in the glass maker for 8 yuan each and hold them for three years, Fuyao said in a statement to the Shanghai Stock Exchange. That is a 19.9 percent discount to Fuyao's closing share price Wednesday of 9.99 yuan.
Fuyao shares rose Monday 5.8 percent to close at a record of 10.57 yuan as it resumed trading after a two-day suspension. The shares have doubled in value this year.
Goldman Sachs is taking advantage of Chinese efforts to let overseas investors purchase strategic stakes in its publicly traded companies to tap the world's fastest-growing major car market. Goldman and its partner, CDH China Growth Capital Fund II, are also buying Shuanghui Group, the largest meat processor in China, for $252 million.
"Fuyao dominates China's vehicle glass market and is increasing supplies to international automakers to boost earnings," said Luo Wei, an analyst at China International Capital in Shanghai, in a research note Monday. The stake sale would help reduce the company's financial expenses, increasing profit by 32 percent next year and by 30 percent in 2008, he said.
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December 1st, 2007
Source: Iht.com |
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