Singapore-based Global Logistic Properties Ltd. (GLP) says it has signed an agreement, in which a group of Chinese investors will invest US$2.5 billion in the company, according to a company announcement.
The investors include an unnamed Chinese insurance company, Bank of China’s subsidiary, Bank of China Group Investment Ltd., and Hopu Investment Management Co.
The deal is structured into two parts. First, the investors will acquire US$1.48 billion of new shares in GLP’s wholly-owned Chinese subsidiary, China Holdco.
At the same time, the investors will acquire US$163 million of new shares of GLP’s Singapore listed entity, GLP Listco, at S$2.755 per share. The price represents 3% discount to the volume weighted-average trading price over the last 30 days.
As a result, the investors will hold around 1.5% of GLP Listco.
In the second part of the transaction, the investor group will purchase up to US$875 million of new shares in China Holdco.
The investors, together with GLP employees and its management team, could acquire up to a 34% stake in China Holdco.
The price of the new China Holdco shares will be fixed on the basis of the net book value of the company’s consolidated businesses. These new shares are also subject to a three-year lock up period.
GLP says it will use the majority of the proceeds to strengthen and further develop its logistics network in China.
Fang Fenglei, founding partner and chairman of Hopu, will join the board of GLP.
Last November, GLP launched a US$1.5 billion China logistics infrastructure fund to develop modern logistics facilities in China.
In other recent deals in the sector, Tencent says it will acquire 9.9% of China South City for US$193 million last month. China South City is a Hong Kong-listed Chinese logistics center developer.
Last summer, the Carlyle Group and the Townsend Group announced a strategic partnership with Chinese logistics warehouse developer, Shanghai Yupei Group, to jointly invest in modern warehouses in China.
In a smaller deal, Cathy Capital Private Equity announced that it has invested US$20 million in Shanghai-based Zhengming Modern Logistics Co. last August.
Hopu was co-founded in 2008 by two former Goldman Sachs executives, Richard Ong and Fang Fenglei. Richard Ong left in 2011 and launched RRJ Capital.
GLP is a provider of modern logistics facilities in China, Japan and Brazil. It has a total property portfolio of 23.4 million square meters across 63 cities.
(Update on August 5, 2014: The unnamed Chinese insurance company is confirmed to be Beijing-based China Life Insurance Co. Ltd.)