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Carlyle Group has agreed to invest US$190 million in China Fishery Group Ltd., the Hong Kong-based company said, in the latest move by a private-equity company to tap into China's growing agriculture sector.
In a private placement, Carlyle will buy 113.5 million new shares in China Fishery, which lists stock in Singapore, at 1.85 Singapore dollars （US$1.33） per unit. It will also buy 26.7 million warrants, each carrying the right to subscribe to one new share at an exercise price of S$2.10, China Fishery said in a statement.
After exercising all the warrants, Carlyle would hold up to 13.6% of the enhanced share capital of China Fishery.
With incomes in China rising, private-equity investors have started looking at investments in the country's food chain to take advantage of demand for higher-quality goods and a wider range of meat and vegetables. In March, a consortium that included Blackstone Group L.P. invested $600 million for a combined 30% stake in China Shouguang Agricultural Product Logistic Park, an agricultural-product trading center.
China Fishery is an industrial fishing company that fishes mainly in the North Atlantic. Although it sells fish in West Africa, Northeast Asia and Europe, almost 75% of its revenue came from sales in China in the six months ending March 28.
China Fishery said the deal would provide it with additional capital to pursue strategic investments in the global fishing industry and to “further improve the operational efficiency of the company.” It didn't elaborate on plans for using the proceeds.
“We believe China Fishery will make good use of the expansion capital” and “establish itself as a reliable and responsible supplier of fish products to the global market,” Patrick Siewert, senior director of Carlyle, said in the statement. He said Carlyle will work with the company to build its businesses and “set higher standards in sustainable practices for the industry.”
UBS AG acted as financial adviser to China Fishery and HSBC advised Carlyle.
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