September 9, 2008
Singapore state firm takes stake in Hong Kong exporter
State-linked Singapore investment firm Temasek Holdings said Monday it had bought a stake in Hong Kong-based exporter Li & Fung Ltd. in a deal worth 3.9 billion Hong Kong dollars ($500 million), reported AFP.
Li & Fung issued a statement from Hong Kong on Sunday saying Temasek had made the investment through a wholly-owned subsidiary.
A Temasek spokesperson confirmed the deal.
Under the deal, Temasek subscribed to 168 million new shares at 23.09 Kong Kong dollars each, the average closing price for the last five trading days to September 5, the Hong Kong consumer goods exporter said in its statement.
Temasek's share subscription represents 4.62 percent of Li & Fung's enlarged share capital, the statement said.
"We are very pleased to have Temasek as one of our strategic shareholders in view of its long-term approach to this investment," said Li & Fung Ltd. group managing director William Fung.
David Heng, managing director for investment at Temasek, was quoted in the statement as lauding the Hong Kong company's potential.
"With its robust business model and impressive leadership and management, we believe the company has excellent potential," Heng said.
Li & Fung said it will use the proceeds from the Temasek investment to fund further acquisitions.
Temasek is one of two investment vehicles of the Singapore government alongside the Government of Singapore Investment Corp.