Huiyuan will issue convertible bonds due in 2019 to Baytree Investments, a wholly-owned unit of Temasek. The bonds can be converted into 166 million shares at HK$7 apiece, a premium of 14.38% over the company’s last closing price before the announcement.
After the conversion, Temasek will hold 7.68% of the enlarged share capital of Huiyuan on a fully diluted basis.
Huiyuan says it will use the proceeds for reﬁnancing of existing debts and general working capital of the company.
In 2010, SAIF Partners acquired a 22.98% stake in Huiyuan from France-based dairy giant Danone Group for HK$2.02 billion ($260 million).
After the latest transaction, SAIF’s stake will be diluted from 16.87% to 15.58%.
Founded in 1992, Hong Kong-listed Huiyuan is the largest juice maker in China by sales volume, and accounts for about 56% of the Chinese juice market.
The company just acquired RMB117.7 million ($19 million) of assets from Japan’s alcoholic beverage producer Suntory Holding last week.