Zhongnan Heavy Industries, ZEG Capital Launch Buyout Fund

Jiangyin, Jiangsu province-based Chinese steel equipment manufacturer Jiangyin Zhongnan Heavy Industries says it will partner with Chinese investment firm ZEG Capital to raise a media-focused buyout fund.

The fund will seek to collect as much as RMB3 billion ($480 million) for a joint fund called Zhongnan Cultural Media Fund Management, according to a company announcement.

The fund is expected to reach a first close of RMB1 billion at an unspecified time.

ZEG Capital is to commit RMB100 million toward the first closing, while Zhongnan Heavy Industries and Zhongnan Heavy Group will commit RMB140 million and RMB100 million respectively.

The fund plans to raise the remaining capital from third-party investors.

The fund will focus on investing in television production, Internet media, advertising, entertainment programs and online gaming.

Shenzhen Stock Exchange-listed Zhongnan Heavy Industries diversified its business into the media sector through a 100% acquisition of Beijing-based TV producer Datang Brilliant Media last month.

ZEG Capital participated in the acquisition and will take a 5% stake of Zhongnan Heavy Industries after the transaction.

Established in 2008 from overall restructuring of Jiangyin Jiangnan Piping Equipment Co. Ltd, Zhongnan Heavy manufactures various steel material of pipe fittings and flanges, piping fabrication and pressure vessels which are widely used in the petrochemical, petroleum, chemical, ship building, and nuclear industries.

Founded in 2011, ZEG Capital is an investment arm of Beijing-based real estate developer China Zhongzhi Enterprise Group.

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