June 30, 2010


Carlyle to invest in China Fishery Group


Carlyle Group, the world's largest private equity investment firm, has agreed to invest US$190 million in China Fishery Group Ltd. in the latest move to tap into China's growing agriculture sector.


In a private placement, Carlyle will buy 113.5 million new shares in China Fishery, which lists stock in Singapore, at SGD1.85 (US$1.33) per unit. It will also buy 26.7 million warrants, each carrying the right to subscribe to one new share at an exercise price of SGD2.10 (US$1.50), China Fishery said in a statement.


After exercising all the warrants, Carlyle would hold up to 13.6% of the enhanced share capital of China Fishery.


With incomes in China rising, private-equity investors have started looking at investments in the country's food chain to take advantage of demand for higher-quality goods and a wider range of meat and vegetables. In March, a consortium that included Blackstone Group L.P. invested US$600 million for a combined 30% stake in China Shouguang Agricultural Product Logistic Park, an agricultural-product trading centre.


China Fishery is an industrial fishing company that fishes mainly in the North Atlantic. Although it sells fish in West Africa, Northeast Asia and Europe, almost 75% of its revenue came from sales in China in the six months ending March 28.


The fishing company said the deal would provide it with additional capital to pursue strategic investments in the global fishing industry and to "further improve the operational efficiency of the company."


"We believe China Fishery will make good use of the expansion capital and establish itself as a reliable and responsible supplier of fish products to the global market," Patrick Siewert, senior director of Carlyle, said in the statement. Carlyle will work with the company to build its businesses and set higher standards in sustainable practices for the industry, he added.


UBS AG acted as financial adviser to China Fishery and HSBC advised Carlyle.