Lenovo Buys Stake in BOC International
21st Century Business Herald, 3/19/10
During the National People's Congress (NPC) and the Chinese People's Political Consultative Committee (CPPCC) meetings in Beijing last week, Lenovo Group (0992.HK) founder and chairman Liu Chuanzhi publicly confirmed that Legend Capital, an independent venture capital subsidiary of Legend Holdings, the investment arm of Lenovo, had purchased shares in the Bank of China International Holdings, Ltd. (BOCI). The terms of the transaction between Legend Capital and the State Development and Investment Corporation (SDIC) have been decided upon, and will need only to be approved by the China Securities Regulatory Commission (CSRC).
According to a copy of the agreement received by the 21st Century Business Herald, Legend Capital will purchase a 12% stake in BOCI for RMB 900 mln, RMB 450 mln of which Legend has already paid out in an initial payment.
According to public figures, BOCI had net profits of RMB 770 mln in 2009; a 12% share of that would be worth RMB 92 mln. After purchasing its stake in the company, Legend will stand to receive bonuses based on BOCI's 2009 performance.
It had previously been widely rumored that Hony Capital, a China-focused private equity firm affiliated with Legend Holdings, had been the buyer of the BOCI shares.
Keywords: M&A Liu Chuanzhi hardware Lenovo BOC International CSRC Legend Capital Legend Holdings 0992.HK profit State Development Investment Corporation
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