Hopu Investment Management, along with LP and frequent co-investor Temasek Holdings, are among eight investors that have committed HK$1.55 billion (€150 million; $200 million) to Asian Citrus Holdings, according to a disclosure the Hong Kong Stock Exchange (HKSE) and Alternative Investment Market-listed company submitted to the bourses.
Post-transaction, it is unclear what size stake Hopu and Temasek will each own, but the sum buys all eight investors 175 million placing shares of Asian Citrus at HK$8.88 per share, roughly translating to 20.18 percent of the company’s existing issued share capital, the statement noted. Asian Citrus share prices were trading on the HKSE at HK$9.60 per share at press time.
Asian Citrus is the largest orange plantation owner and operator in mainland China, with operations in the Guangxi Zhuang Autonomous Region and the Xinfeng Plantation in Xinfeng County in Jiangxi province, according to its website. In total, the two plantations are populated by about 1.3 million orange trees and cover over 67 square kilometres.
The company said it would use the fresh capital to fund its acquisition of juice maker BPG Food & Beverage for HK$780 million and the subsequent expansion and restructuring of the company. Asian Citrus had signed a memorandum of understanding to acquire the company in September this year.
Bank of America Merrill Lynch arranged the deal.
Hopu is currently investing from its maiden $2.5 billion fund, which was established in 2007. The fund is backed by investors including Daiwa Securities, Sachs Singapore's and Temasek Holdings, which is a regular co-investor in many of Hopu's deals.
In April, they were part of a consortium that invested $235 million in meatpacker China Yurun. Around the same time, the pair, in collaboration with Hong Kong-listed industrial investment company Silver Grant International Limited, reportedly agreed to a $110 million investment in Chinese company Winsway Coking Coal Holdings Limited in return for a 20 percent stake in the company's equity.
The Asian Citrus deal comes on the heels of reports which surfaced in September that Hopu Investment Management was to wind business down as two of its three co-founders planned to retire once the firm’s existing investments had been exited. Hopu has declined to comment on the reports.