Citic Pacific Completes $37 Billion Purchase of Parent’s AssetsJoshua Fellman
Citic Pacific Ltd. completed a HK$286.6 billion ($37 billion) purchase of assets from its state-owned parent, adjusting the payment to include less cash and more new shares.
The Hong Kong-based company paid HK$53.4 billion in cash and issued 17.3 billion new shares to units of its parent in exchange for Citic Corp., the company said in a Hong Kong stock exchange filing yesterday. Citic Pacific said it also completed the private sale to investors of 3.95 billion shares, raising HK$53.3 billion.
Citic Pacific, to be renamed Citic Ltd., said in April it would buy assets from parent Citic Group Corp., the country’s first state-owned investment corporation, ranging from financial services to energy and property.
The transaction comes as Chinese President Xi Jinping advocates the most sweeping changes since Deng Xiaoping’s liberalization in 1978, including loosening yuan trading and allowing more private investments in state businesses. The deal, which is the biggest asset injection into a Hong Kong-listed unit from China, may become a model for similar moves by government-controlled companies.
The deal was earlier structured to include a cash payment of HK$63 billion and the issue of new shares worth HK$223.5 billion, according to yesterday’s filing. The value of the share portion of the deal increased to HK$233.2 billion under the revised payment terms.