Peking University to Sell Troubled Founder to SOE, Redd Says
Peking University to Sell Troubled Founder to SOE, Redd Says
(Bloomberg) -- A Peking University unit is selling its stake in troubled Founder Group to a state-owned enterprise, according to a Redd Intelligence report.
Peking University Asset Management Co. has received a 2 billion yuan ($286 million) deposit for the sale of its 70% stake in Peking University Founder Group Co. to local state-owned firm Zhuhai Huafa Group Co., said the report on Thursday, citing two sources.
Huafa may announce the deal before the end of the month, according to the report. Due diligence for the sale began three months ago and is almost completed, it said.
The planned sale comes as Founder Group struggles to deal with a rising debt-asset ratio. Its dollar bonds yielding above 15% are worth $2.2 billion, accounting for a tenth of all comparable dollar debt in China, according to data compiled by Bloomberg as of mid-October.
The deal, if it goes through, will see Huafa acquire Founder’s IT, pharmaceutical and commodities trading businesses, as well as the Shanghai-listed brokerage Founder Securities Co., which has a market capitalization of $8 billion. The brokerage’s shares were up 1.4% at the mid-day trading break on Friday. The stock has gained 28% this year.
Peking University Founder Group’s dollar bond due 2023 jumped 4.2 cents on the dollar Thursday. It extended gains to trade at 61.4 cents on the dollar on Friday, while Huafa’s dollar bond due 2024 dropped to a record low, according Bloomberg-compiled data.
Staff at Peking University Asset Management and Founder Group declined to comment on the matter. Huafa Group didn’t immediately reply to an e-mailed enquiry and calls to its headquarters went unanswered.
--With assistance from Yuling Yang, Emma Dong and Ina Zhou.
To contact the reporter on this story: Rebecca Choong Wilkins in Hong Kong at rchoongwilki@bloomberg.net
To contact the editors responsible for this story: Neha D'silva at ndsilva1@bloomberg.net, Magdalene Fung
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