Warburg Pincus is reportedly planning to invest nearly $700 million in China Huarong Asset Management.
As per the terms of the deal, Warburg Pincus purchased a 21% stake in Huarong, Bloomberg reported.
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Recently, China Huarong Asset Management has agreed to sell stakes in itself to eight foreign and domestic investors including Goldman Sachs Group Inc, China Life Insurance, and Khazanah Nasional Bhd. in Malaysia, for around $2.4 billion.
The consortium includes other buyers such as China International Capital Corp., China Life Insurance Group Co., CITIC Securities International, Cofco and Fosun International.
The firm intends to conduct an IPO in HIong Kong before the end of 2015; Huarong Chairman Lai Xiaomin was quoted as saying by Bloomberg.
Lai Xiaomin added that Huarong is also planning to acquire bad assets of companies outside the financial industry.
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By GlobalDataAdditionally, China Huarong will enter into partnerships with the strategic investors in various business areas, including asset management, investment and financing, investment banking, financial leasing, risk management, internal controls and employee training.
Warburg Pincus said: "The diversified financial channels and healthy debt structure of China Huarong provides itself stable and low-cost capital, laying a solid foundation for achieving sustainable profit growth."
Lai Xiaomin said: "The strategic partnership will not only help China Huarong enhance its capital strength and structure and improve its corporate governance, but also introduce international standards to improve the company’s operational capabilities and services to the real economy."
