The Digital Source For China's Tech Innovation Since 2000

Search
Close

Rumor: Gome May Sell Stake To Foreign Investors

December 18, 2008
Gadgets & Electronics

Chinese electronics retailer Gome, whose chairman Huang Guangyu is currently under investigation for financial crimes, has started initial negotiations with foreign investors for the possibility of sales of stakes in the business.

Britain's Financial Times recently published a report which stated Gome's high level executives had contacted several overseas counterparts and global private equity firms about investment issues. It quoted an insider as saying if the negotiation about the strategic investment goes smoothly, Warburg Pincus Asia will play a key role. Starting from 2006, Warburg Pincus has been an important strategic investor in Gome.

In 2006, Warburg Pincus invested USD150 million in Gome by acquiring USD125 million convertible bonds and USD25 million warrants. After that, Gome completed a series of big operations, including the acquisitions of another two electronics retailers in China — Yongle and Dazhong. On May 14, 2007, Warburg Pincus sold 90.898 million Gome shares at HKD13.35 per share, cashing HKD1.213 billion. Upon completion of the transaction, Warburg Pincus gained HKD200 million profits and still held 85.78 million shares and warrants of Gome.

However, with the exposure of Huang's share manipulation scandal, the realization of Gome's promise to Warburg Pincus, which is to invest the retail assets of the parent company into its listed company before 2011 and to merge all of the parent company's retail networks on Chinese mainland into the listed company within five years, has become harder. Therefore, Warburg Pincus may implement more active operations and introduce new strategic investors to Gome.

Commenting on the news, Chen Xiao, who was appointed as acting chairman of Gome after Huang was investigated by the Beijing police, told local Chinese media that he does not know anything about these machinations and all major changes will be published on official company reports.

Tags: ASIA | Beijing | Britain | Business | chairman | Chen Xiao | China | Chinese | Dazhong | finance | financial | Gadgets & Electronics | Gome | Huang Guangyu | investment | investor | IT | media | news | News Media | overseas | police | private equity | report | retail | retailer | rumor | United Kingdom

Other Related News:

Analog Devices' Chipsets Featured In New TCL Phones

December 16, 2003

China Mobile Will Soon Begin Large TD-SCDMA Purchases

February 27, 2007

China deploys “career killer” missiles in the South China Sea, and the United States plays the region’s largest war game for 40 years

August 7, 2021

chinadotcom Corporation Builds Independent Board of Directors

December 19, 2003

The great Chinese mortgage strike: Thousands of homebuyers are refusing to pay their home loans as growing boycotts spread online

July 19, 2022

Acorn Blames Sichuan Earthquake For 25% Net Revenue Drop

August 20, 2008

The9 Report Q1 Results

May 25, 2005

Digital River Expands Symantec's International E-Commerce Operations

January 29, 2004

Belgium sees Chinese smartphones as a spying risk

February 15, 2022
  • Contact Us
  • About Us
  • Corrections and Disclosure
  • Privacy Policy
  • Terms & Conditions
Menu
  • Contact Us
  • About Us
  • Corrections and Disclosure
  • Privacy Policy
  • Terms & Conditions
© 2022 ChinaTechNews.com. A Service of Asia Media Network.
Twitter
Posting....