HNA IN TALKS TO BUY VALUE PART­NERS STAKE

Firms aim to reach deal within next few weeks, say sources

New Straits Times - - Business | World - LI­NUS YIP

HONG KONG

CHI­NESE con­glom­er­ate HNA Group Co is in talks to pur­chase a stake in Value Part­ners Group Ltd, ac­cord­ing to peo­ple fa­mil­iar with the mat­ter, in what would be at least its fourth in­vest­ment in an as­set man­ager in half a year.

HNA was in dis­cus­sions to buy at least part of chair­man Cheah Cheng Hye’s hold­ing in Value Part­ners, which he helped found in 1993, said the peo­ple. It might and ex­clu­sions would likely lead to in­creased smug­gling across China’s por­ous south­ern bor­der, while some im­ports from ma­jor pro­duc­ers might be shipped through third-party coun­tries.

The gov­ern­ment had also ex­cluded about 190 smaller coun­tries and re­gions from the penal­ties, po­ten­tially di­lut­ing their im­pact, said an­a­lysts. These in­clude some of China’s clos­est trad­ing then seek to in­crease its stake fur­ther, ac­cord­ing to the peo­ple.

A trans­ac­tion could value the com­pany, one of Asia’s largest in­de­pen­dent as­set man­agers by mar­ket cap­i­tal­i­sa­tion, at more than US$2 bil­lion (RM8.62 bil­lion), said an­other per­son.

Shares of Value Part­ners rose 8.6 per cent to HK$7.85 (RM4.34) in af­ter­noon trad­ing yes­ter­day, headed for the big­gest gain in more than a year, be­fore sus­pended in the noon.

The par­ties aimed to reach a deal within the next few weeks, ac­cord­ing to the peo­ple. No fi­nal agree­ments had been signed, part­ners such as the Philip­pines and Pak­istan, both smaller sugar pro­duc­ers.

“Of course, it will sup­port the do­mes­tic in­dus­try for a short time,” said a trader. “(But) the global raw sugar mar­ket just needs to drop a lit­tle be­low US$0.15 (RM0.65) to make it prof­itable to im­port into China.”

Global raw sugar prices were at US$0.17 per pound on Fri­day.

China, which im­ports about and there was no cer­tainty the talks would re­sult in a trans­ac­tion, said the peo­ple.

Value Part­ners, which had ex­pressed am­bi­tions of be­com­ing the Asian equiv­a­lent of Fidelity In­vest­ments, had about US$15 bil­lion of as­sets un­der man­age­ment at the end of last month, ac­cord­ing to a fil­ing last week. “Value Part­ners has a strong brand pres­ence in Hong Kong,” said Li­nus Yip, chief strate­gist at First Shang­hai Se­cu­ri­ties Ltd yes­ter­day. “It would be a good fit for HNA as it seeks to build up a global net­work.” Bloomberg

It would be a good fit for HNA as it seeks to build up a global net­work.

three mil­lion tonnes of sugar a year, al­lows 1.94 mil­lion tonnes of im­ports at a tar­iff of 15 per cent as part of its com­mit­ment to the World Trade Or­gan­i­sa­tion.

Im­ports be­yond this at­tract a 50 per cent levy. Yes­ter­day’s rul­ing would add an ex­tra 45 per cent duty to these im­ports in the cur­rent fis­cal year, said China’s Com­merce Min­istry in a state­ment, tak­ing the to­tal to 95 per cent. Reuters

BLOOMBERG PIC

China’s move to im­pose hefty penal­ties on sugar im­ports is ex­pected to in­flict a blow on top grow­ers such as Thai­land over the short term.

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