China Huarong takes 5.8% stake in toll road operator (updated)

Zhongxin Fruit and Juice

20/11/2023 13:36

(Adds details; paragraph 5-7)
       Nov 20 (Reuters) - State-owned China Huarong Asset
Management  2799.HK  said it plans to buy a 5.8% stake in China
Merchants Expressway Network & Technology  001965.SZ  for 3.01
billion yuan ($417.4 million). 
    The deal is expected to bring stable earnings to Huarong and
optimise its asset allocation, the distressed debt manager said
in a filing to the Hong Kong stock exchange on Monday.
    Huarong is buying the China Merchants Expressway stake from
Zhongxin No.1, a fund linked to the state asset regulating
authority in the southwestern Chinese municipality of Chongqing,
according to the filing.  
    Huarong purchased the stake at 8.4 yuan per share, or 90.71%
of the 9.26 yuan closing price on the last trading day before
the deal was signed, according to the filing. 
    The deal would also help "revitalize the existing assets of
local state-owned enterprises," Huarong said, without
elaborating. 
    China Merchants Expressway, which runs toll road and
transport technology businesses, is controlled by the
state-owned China Merchants Group. 
    The deal is pending approval by Chinese regulatory bodies,
Huarong said. 
    Huarong said last month it has agreed to buy a 5.01% stake
in CITIC Ltd  0267.HK  for HK$13.63 billion ($1.75 billion) from
Chinese finance ministry-controlled CITIC Group, which also
holds a 26.5% stake in Huarong.   
    Huarong also said it plans to change its name to China CITIC
Financial Asset Management Co Ltd, in a bid to leverage the
brand value of CITIC Group. 
    China Merchants Expressway reported a net profit of 5.25
billion yuan in 2022, compared with 5.54 billion yuan in 2021,
Huarong's filing showed. 
    

($1 = 7.2111 Chinese yuan renminbi)
($1 = 7.7949 Hong Kong dollars)

 (Reporting by Roxanne Liu and Kane Wu; Editing by Susan Fenton
and Louise Heavens)
 ((hongkong.newsroom@thomsonreuters.com; （8610）6627-1277;
Reuters Messaging: roxanne.liu@thomsonreuters.com))