Blackstone, Capital International lead $600m pre-IPO investment

Blackstone and Capital International have reportedly acquired a 30% stake in Chinese agricultural company Dili ahead of its listing on the Hong Kong stock exchange.

A consortium of investors led by The Blackstone Group and Capital International has invested $600 million in Dili Group Holdings, a Chinese agricultural company and parent of Shouguang Agricultural Product Logistic Park.

Capital International and Blackstone will appoint representatives to Dili Group's board, the company said in a statement. 

The consortium will acquired a stake of about 30 percent in the company in a pre-IPO transaction, unnamed sources told Reuters. Other investors in the consortium include Warburg Pincus and Atlantis Investment, the sources said.  The company plans to list on the Hong Kong stock exchange and will seek to raise about $700 million through an initial public offering later this year, according to media reports.

Blackstone and Warburg Pincus did not respond to a request for comment by press time. Capital International could not be reached.

Dili Group provides a trading platform for agricultural products and related value-added services in China. Among other markets, it owns Shouguang Agricultural Products Logistics Park, one of the country’s largest agricultural market operators. The company is looking to develop and acquire markets in both, places of origin as well as places of distribution and become the largest agricultural products trading platform in China.

In November last year, Blackstone opened Blackstone (China) Equity Investment Management Company, a Chinese subsidiary managing its first regional RMB fund; Blackstone (China) Equity Investment Fund. In August last year, the firm entered into a joint venture with the Pudong government to raise up to RMB5 billion ($732 million; €497 million) for its first RMB-denominated fund. 

The investment in Shouguang will mark Blackstone’s second significant investment in China and its first pre-IPO investment. The firm completed the acquisition of a 20 percent stake in state-backed China National Bluestar, a chemicals company, for $600 million. The deal was announced in 2007 and closed in 2008.