New Asia Partners exits China Huiyin

The firm has sold its stake in the Chinese household appliance retailer in a pre-IPO restructuring, and is working on developing its debut private equity fund for investing in China.

New Asia Partners, a Hong Kong- and Shanghai-based private equity group that makes principal investments, has diluted its stake in China Huiyin, a household appliance retailer that is preparing to list on the Hong Kong Stock Exchange.

China Huiyin sells electronic products and household appliances such as washing machines, refrigerators and televisions. It also provides maintenance services in Jiangsu and Anhui provinces in China.

Greg Grego, managing director and chief financial officer of New Asia Partners told PEO that the firm and four other co-investors from the investment group that it led, have sold their equity interest in the company for $43.3 million (€27.2 million). The other co-investors who have sold their equity stakes include Pope Investments, LIM Asia Arbitrage, LK Ang Corporate and MCP International.

However, Pope Investments converted the bonds it held into an equity interest and Dalton Investments, which did not write down its original stake, did the same with the bonds it held as well. Following the exit by members of the original investment group, the remaining group’s equity stake has decreased from 47.3 percent to 24 percent.

Grego said that New Asia Partners led two investments in China Huiyin, in December 2005 and March 2007. The firm declined to disclose details regarding the size of the firm’s investment and the stake it owned in the company.

Dennis Nguyen, chairman of New Asia Partners, stepped down form the company's board following the completion of the sale.

The firm provides expansion capital to mid-market companies in China. It invests primarily in sectors such as life sciences, retail, and the environment and alternative energy.  Grego said that “the overall investment theme is the growing buying power of the middle class in China.”

He said that the firm is working on developing its first private equity fund for investments in China. The fund will maintain the same investment strategy that the firm has employed thus far.