CITIC Private Equity is reported to be one of three private equity firms that have agreed to acquire 10 percent of bankcard association China Unionpay.
The private equity arm of CITIC Securities will be joined in the transaction by V-Stone Investments, the investment arm of fashion company Youngor Group, and an unnamed local investor, sources told Reuters.
The three firms will reportedly pay around RMB800 million ($117 million; $82 million) for a combined 10 percent stake in the company, which plans to go public next year.
The shares will be purchased from existing stock held by the company’s employees. According to Reuters, China Unionpay has been told by regulators it must reduce the amount of stock held by employees before it goes public.
China Unionpay was established in 2002 and has since become the major card services provider in China. In December 2008, the firm had 1.18 million domestic merchants, 1.85 million POS terminals and 170,000 ATMs. According to the company’s website, since it entered the market the proportion of retail transactions in the “social consumables sector” has risen from 2.7 percent in 2001, to 24.2 percent in 2008.
CITIC Private Equity follows CDH Investments and Bohai Industrial Investment Fund Management in committing to a pre-IPO play in China. Last month, the two firms were part of a consortium of local investors that reportedly paid $293 million for a 20 percent stake in Chinese car maker Chery Automobile, according to The Wall Street Journal. Chery filed a petition to go public with the China Securities Regulatory Commission last year, although the downturn in Chinese markets then saw the Commission suspend all IPO approvals.