BEIJING, May 21 (Xinhua) -- China's state foreign
exchange investment company, which has yet to be fully established, has agreed
to invest three billion U.S. dollars in the U.S. private equity firm the
Blackstone Group, according to a joint news release.
Wang Jianxi, Chairman of the China Jianyin Investment
Limited (China Jianyin), told Xinhua Monday that under an agreement signed on
Sunday, the new state forex investment company will buy a non-voting stake worth
less than 10 percent of Blackstone.
China Jianyin, a state-owned investment company, will
be merged with the new state forex investment company.
According to the news release, the deal will be
closed concurrently with Blackstone's four billion U.S. dollars initial public
offering (IPO) planned to be launched in mid June.
The Chinese investment company will buy the shares at
95.5 percent of the IPO price and hold them for at least four years.
"We are very pleased to make the state investment
company's very first investment in such a well-respected firm as Blackstone,"
said Lou Jiwei, who is in charge of setting up the new investment company.
"We welcome the state investment company to be our
stake holder and feel proud of being part of the very important transaction,"
said Stephen A. Schwarzman, Chairman and CEO of Blackstone.
The deal is "purely commercial" and do not need the
U.S. government approval as the stake is less than 10 percent, said Schwarzman.
The Chinese investment company will not affect the
structure ofBlackstone as its stake is in non-voting shares, said Wang, adding
the deal is a market-oriented decision made by the investment company with the
goal of seeking higher earnings with acceptable risks.
As one of the core investors, the state forex
investment company expects to gain profits from the private equity firm's
investment and rise in share prices, Wang said.
He noted the forex investment company, which is
expected to go into operation this year, may also entrust its forex capital to
other world leading asset management firms.
Chinese Premier Wen Jiabao said at a press conference
following the closure of the annual session of China's top legislature in March
that the country will establish a foreign exchange investment company that will
not be affiliated with any government department or institution.
The company, which will be subject to supervision, is
charged with operating investments in line with state laws to preserve and
increase the value of foreign exchange reserves, said Wen.
By the end of March, China's foreign exchange
reserves had jumped 37.36 percent from a year earlier to exceed 1.2 trillion
U.S. dollars, which are mainly invested in low-yielding dollar bonds.
New York, May 21 (Xinhua) -- The Blackstone Group, the
U.S. second largest private equity investment company, has confirmed that the
soon-to-be-established China's State Investment Company agreed to make a 3
billion dollars investment in the company. full story
BEIJING, May 18 (Xinhua) -- China's foreign exchange
reserve authorities are rumored to have entrusted three billion U.S. dollars to
a U.S. company for investment abroad even though the state forex investment
company has not yet been set up.
Officials were not available for comment on the Friday
report by China Business News.full story
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