Hony Capital has agreed to invest an additional RMB599 million (US$91 million) in Shanghai Jinjiang International Hotels Development Co., according to a disclosure document (in Chinese).
Shanghai-listed Jinjiang International plans to issue 151 million new shares to five investors at RMB29.93 per share in a private placement deal, raising a total of RMB4.52 billion (US$687 million).
Hony Capital will subscribe for 20 million new shares. National Investments Fund Limited, China Great Wall Asset Management Corporation, and HuaAn Future Asset will each subscribe for 15 million new shares.
The biggest investor in the private placement deal is the hotel chain’s parent company, Jinjiang International Hotels (Group) Co., Ltd., which is to subscribe for 76 million shares.
Hony Capital, one of China’s biggest private equity firms, acquired around 12.43% of Jinjiang for RMB15 billion (US$246 million) in August 2014.
In that deal, Hony Capital bought 100 million shares at RMB15.08 per share, a 23% discount to the company’s last closing price.
In September 2015, Jinjiang agreed to acquire 81% of Chinese budget hotel chain 7 Days Group Holdings Ltd. for around RMB8.3 billion (US$1.3 billion).
Investors including the Carlyle Group, Sequoia Capital China, Actis Capital, and senior executives of 7 Days took the hotel operator private in a US$688 million going-private transaction in 2013.