Gome Huang Guangyu crisis is no longer a one-man show of choice – the country th
Management of 19 billion U.S. dollars of assets Warburg Pincus investment cost of 1.5 billion to become the second largest shareholder of Gome, the hidden agenda behind the deal is what?
2006 years of Chinese New Year, Gome (0493.HK) Chairman Huang Guangyu flies is not easy. States United States since the end of last year in Hong Kong to some well-known investment institutions interested in the release of the signal to introduce institutional investors, the investment community really started a few months to a sizeable compete. After many negotiations approached, Huang Guangyu final choice and the world's largest private equity fund Warburg Pincus is one (WarburgPincus) to form the so-called "strategic alliance." Under the agreement, Warburg Pincus will subscribe for 125 million U.S. dollars Gome issued convertible bonds and 25 million U.S. dollars warrants. This is by far the Warburg Pincus investment in China's biggest single.
2 early Gome the dissemination of the news, with institutional investors as Softbank (Softbank) Goodwill Investment warm days of no president, no regrets, "the Mainland in Hong Kong listed companies, the country's investment value of U.S. one of the best. This single investment in China is clearly very beneficial to peace. "GOME long-term follow Li Tong, analyst believes that the" national level the U.S. is to China by a sum of money. "In any case, following the announcement that Gome shares three days, rose 21.5%.
"2006 years of key words is safe"
In this investment, Warburg Pincus has made some very harsh conditions, Huang Guangyu is very readily agreed, that some surprise. Li Tong revealed that the mode of cooperation of two signals, one of Gome's capital may be a bit nervous, the other is Warburg Pincus has not yet completely convinced of the country the United States. "Warburg Pincus's convertible bonds, the period is five years, five years if the stock price more than 6.4 Gome Pincus can share transfer cash in the Hong Kong dollar, or five years China could recover principal and interest level." He pointed out that "China is simply the risk level can be ignored, unless the cash in five can not find the opportunity, or the country less than five years on the U.S. business closed down! "
It really because of tight state funds the United States had to make this choice?
Gome not to be named within a financial director level who do not agree with that. The source said the United States in 2005 was the rapid expansion of the country a key year, a full doubling of the number of stores, but in fact the demand for capital is not strong, from the appliance retail business model point of view, the input is simply to open new store the rent and renovation costs, and these costs also would be admission of suppliers and stores flush a large advertising revenues. From past experience, in 2006 the country should be little pressure on the U.S. capital.
But not denied the person, "to my intuition, initiative from the finance point of view, Huang Guangyu may be a little more positive." GOME series as in the capital market, to head of Huang Guangyu to leave the outside world a "bold, courageous" impression, but the people that "whether a strategic or financial decisions, Huang Guangyu in fact has always been both bold and cautious, he is a particularly strong sense of crisis the people."
Changes in the competitive environment may encourage companies began to adjust the rhythm Huang Guangyu. In 2005, Gome and Suning Appliance, China Paradise in depth each other's hinterland town. War between giants become increasingly direct and bloody, three have suffered declining margins, increasing the number of single-store loss situation, the share price into the downturn. On the other hand, by the end of 2005 the Ministry of Commerce issued new regulations for the retail industry to wider rectification looks fierce.
2005 12 Huang Guangyu in the "China Entrepreneurs" interview brings it in this round of macro-control in some companies have trouble, "said reflection, I think many companies do not only consider the immediate, the most important to consider the future, taking into account security. It is a , fast fish eat slow fish of course, who have fallen is not surprising. The most important thing is you can control their own development within the enterprise, to be pragmatic. "
Said this time Wong Kwong Yu has been with Warburg Pincus financing began secret talks.
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