Asian Private Equity News - May 10, 2006

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Top Three

As part of the ongoing hardening of the stance of China‘s government in relation to foreign investment in this country, Xinhua has released a study from the Chinese Ministry of Information Industry (MII) that says about 90% of Chinese electronics originate with foreign invested enterprises in China. MII says that during the first two months this year, exports of electronic products from foreign ventures in China reached $19.6 billion, a rise of 41% over the previous year. MII says further that the sales revenue of foreign ventures in China‘s electronic information industry account for 81% of the industry‘s sales and 79% of its profits. MII reports that there are now 6,480 foreign-ventured companies at the end of last year. The report follows a report included in last week‘s APEN from the Ministry of Finance that declared that foreign invested companies in China are not paying their fair share of taxes.www.xinhuanet.com/english
Prosecutors in Korea have arrested and detained the president of Lone Star Advisors Korea on charges of embezzlement, breach of trust and misappropriation of funds. Yoo Hoe-won, who was a key participant in Lone Star‘s acquisition of the Korean Exchange Bank from the Korean government. The Supreme Prosecutor‘s office says that the arrest is a “starting point … for a full-fledged investigation into … the sale of KEB.” Korean prosecutors are reportedly seeking the extradition and arrest of Steven Lee, former CEO of Lone Star in Korea, who currently resides in the United States and whom Lone Star‘s chairman has claimed embezzled funds from Lone Star during his tenure as leader of the firm in Korea. For readers who may have forgotten, these new charges are separate from the earlier investigations into alleged tax evasion and illegal business practices or activities. Separately Lone Star now faces charges that it bribed Korean government officials during the acquisition.www.lonestarfunds.com
Veronica John of the Asian Development Bank chaired a private equity discussion this past week at ADB‘s 39th annual meeting in Hyderabad, India. Among the topics was the rise of India and the People‘s Republic of China and “the shift taking place in the balance of economic and political power.” John, who summarized the discussion, said some of the participants predicted “a decline in living standards for Americans. Services, research and development and basic research are moving to Asia at a breakneck pace … which over time may result in a 50%-75% devaluation in the value of the dollar.” For a copy of John‘s summary, send an email tovljohn@adb.org
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Venture Deals and Minority Stakes

Injazat Capital has received a $37.5 million investment for its Shefa Healthcare Fund from the Saudi Health Investment Co. The fund has a target of $100 million. In a related story, the fund has acquired a majority stake in two Saudi hospitals owned by Saudi Arabia‘s Al Mashafi Group.www.injazatcapital.com
ICICI Ventures has invested $9 million in Metropolis Health Services, a chain of diagnostic centers based in Mumbai, India. ICICI made the investment from its India Advantage Fund I.www.iciciventure.com andwww.metropolisindia.com
Indian IT outsourcing firm Global Consultants (GCI) has received a $30 million round of financing from Oak Investment Partners. The investment was led by Oak General Partner Ed Glassmeyer.www.g-c-i.com andwww.oakvc.com
The Templeton Group has confirmed for APEN that one of its investment funds, the Templeton Strategic Emerging Market Fund II, will acquire 20 million to 80 million shares in AsiaPharm for as much as $40.8 million. AsiaPharm is a Chinese drug research and development company based in the northeast coastal province of Yantai. The purchase will likely be made through an offering of additional shares in AsiaPharm on the Singapore stock exchange.www.franklintempleton.com andwww.asiapharm.biz
Samsung Ventures has invested $15.4 billion in Sandbridge Technologies, a fabless chipmaker based in White Plains, N.Y. The investment brings Sandbridge‘s Series B round total to about $38 million. To date, it has raised more than $52 million in two rounds. Other investors include Bessemer Venture Partners, Atlas Venture, Doughty-Hanson Technology Venture, Columbia Capital, Siemens Venture Capital and Castile Ventures.www.sandbridgetech.com
Media sources in Australia are reporting that New Zealand retirement village company Vision Senior Living has received a $15.4 million investment from JB Were Goldman Sachs of Australia. It is the first investment into aged care and retirement for JB Were, following multiple investments in the market sector by U.S. based Newbridge Capital and others.www.visionseniorliving.co.nz andwww.gsjbwere.com
Gem India Advisors, a U.K.-based private equity firm, has acquired 26% of Indian food manufacturer Baker‘s Circle for an undisclosed amount. Baker‘s Circle, based in Guragon, India, supplies restaurant chains, including Subway, KFC, Pizza Hut and others.www.gemny.com
Media sources in Malaysia report that Nanopharm Technologies and LLC Polymorph, two collaborators in the development of nanotech based drug delivery techniques will receive about $10 million in funding from SCS Capital Berhad of Malaysia. The investment is part of an overall $40 million that the two companies are seeking to raise for a joint development project.
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New Funds

London Asia Capital has formed a joint venture with Shanghai United Assets and Equity Exchange (SUAEE), one China‘s 12 government-owned private equity exchanges. Under the agreement, the two firms will work together to restructure, raise capital and IPO Chinese companies outside of China. SUAEE currently has over 300 companies listed on its exchange. Under Chinese law, state-owned businesses and assets being privatized or sold must be advertised through one of the country‘s 12 private equity exchanges. SUAEE is said to be responsible for about half of the assets sold through these exchanges. Separately, London Asia and SUAEE will consider developing a private equity fund within China to assist the companies that they will restructure and list.www.londonasia.com andhttp://new.suaee.com/suaee/portal/english
Japan‘s Tokyo Electron has announced the formation of TEL Venture Capital, a VC arm that will be based in Austin, Texas. TEL will invest as much as $10 million per year in semiconductor-related startups.www.tel.com/eng/index.htm
Buyouts and Mergers

According to reports in Australian media, Sydney‘s Macquarie Bank has decided to withdraw its hostile bid for Patrick Corp. Macquarie had entered a last minute bid for Patrick, in competition with a bid for Patrick by Australian transportation firm Toll Corp. T he withdrawal comes after Toll Corp. launched legal actions against Patrick executives, whom it alleged were colluding with Macquarie to sell Macquarie their personally held shares.www.macquarie.com.au andwww.toll.com.au andwww.patrick.com.au
Media sources in Hong Kong are reporting that LF Asia Investments has acquired several menswear shops held by Trinity Textiles and Jadestar Investments for an undisclosed price. The shops include Cerruti 1881, Gieves & Hawkes and D‘Urban.www.lfvc.com
Australia‘s Baycorp Advantage (ASX: BCA) has sold its debt collection subsidiary, Baycorp Advantage Collections Services, for $77 million in cash to Trans Tasman Collections. Trans Tasman is a consortium made up of private equity investors Allco Equity Partners and Deutsche Bank Capital Partners of Australia. Allco already held a 17% stake in Baycorp.www.allcoequitypartners.com.au andwww.baycorpadvantage.com
Dubai International Capital, a subsidiary of Dubai Holdings and one of the investment arms of Dubai‘s government, says that it has completed its $1.3 billion acquisition of Doncasters from the Royal Bank of Scotland. The deal, first announced in December 2005, appeared to be in trouble after furor erupted in the United States over DIC‘s acquisition of UK Ports. The completion of the Doncasters‘ deal follows approval of the deal by U.S. Senate Committee on Foreign Relations, the U.S. Treasury Department and President George Bush. Doncasters is a U.K.-based company, but it has significant defense-related contracts and manufacturing facilities in the United States.www.dubaiic.com andwww.doncasters.com
Exits and IPOs

Gallant Venture, a Singapore-based investment holding company, has registered to go public on Singapore Stock Exchange. Gallant‘s principal shareholders include the Salim Group, the Parallax Group, SembCorp Industries Ltd. and the Ascendas Group. Gallant is a private provider of utilities in Batam and Bintan, supplying electricity, telecommunications, water and waste management services to its industrial parks and Bintan Resorts.www.gallantventure.org
Reliance Communications Ventures, the telecom arm of Anil Ambani Group of Mumbai, India, has announced a foreign GDR/ADR offering in the hope of raising $1 billion. The offering values the company at $15 billion.www.rcovl.com

Miscellaneous

Media sources in Korea report that the sale of Carrefour‘s retail outlets in Korea to Korean retailer eLand will be investigated by Korean tax authorities. In an indication of just how tough the Korean market has become, Carrefour announced plans to build stores and invest in Iran just days after completing its sale in Korea.www.carrefour.com
STIC International is seeking a Senior Analyst/Associate to lead its China investment practice in Hong Kong. Candidates should have at least three years of experience working in Asian venture capital and be fluent in Mandarin and English. Contactinfo@sticinternational.com
Pushpendra Sharma, a principal at Mantra Consultants, has authored a report on India‘s private equity real estate investment and development market. For a copy of the repor t, which covers commercial, industrial, civil and consumer property development oversight, contact the author atpnsharma@mantraconsultants.com.
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