Baring-backed Minth raises $450m

The Chinese auto parts manufacturer, in which Baring Private Equity Partners has a minority stake, has raised $450m from an IPO in Hong Kong.

Minth Group, the third-largest auto parts maker in China, has raised HK$3.5 billion ($450 million; €382 million) from its listing on the Hong Kong Stock Exchange.

Baring Private Equity Partners (BPEP), the London-based private equity firm with offices in Europe, Asia and Latin America, was reported to have paid around $27 million for an 11.25 percent stake in Minth in June this year. The company is 60 percent-owned by its Taiwanese founder, Chin Jong-hwa.

Ningbo-based Minth sold 200 million shares into the IPO at HK2.25 per share. This was roughly at the mid-point of an indicative range of between HK$1.98 and HK$2.56 per share.

In its prospectus, Minth said it would use more than 60 percent of the proceeds to double its production capacity and establish new manufacturing facilities in addition to the ten it already operates. The firm will use the rest of the money to strengthen its research and development activities and expand its overseas network.

A combination of factors may have led to Minth failing to list at the upper end of its indicative price range. Investors were understood to be uneasy at the prospect of fierce competition and possible price wars in the sector. In addition, some massive recent IPOs in Hong Kong, such as China Construction Bank, have soaked up liquidity.

Minth receives orders for its auto parts from some of the world’s largest car makers including General Motors, Ford and Daimler Chrysler.       

Baring Private Equity Asia, the Asian arm of BPEP, invested in Minth Group through its Baring Asia Private Equity Fund II, which closed on $257 million in September 2002. No information is available at this stage on whether Baring is intending to sell any or all of its stake in Minth through the IPO.