Jardine Strategic to invest in China car distributor

JARDINE Strategic Holdings Ltd has agreed to invest US$731 million to buy a 20 per cent stake in Hong Kong-listed Zhongsheng Group Holdings Ltd, a distributor of Volkswagen, Porsche, Mercedes Benz and Audi cars in China.

The 83 per cent-held unit of Jardine Matheson created a buzz in Hong Kong and Singapore yesterday when it said it would subscribe for 238.56 million new Zhongsheng shares around HK$10.80 each and HK$3.09 billion (S$508 million) worth of convertible bonds which can be converted in 2017.

At HK$10.80 a share, the subscription price represents a discount of about 6.3 per cent to the closing price of HK$11.52 per Zhongsheng share in Hong Kong on Jan 17, the last trading day prior to the announcement.