Anhui Conch Cement confirms MS-IFC investments

Anhui Conch Cement confirms MS-IFC investments
Published: 30 December 2005



MS Asia Investment, an entity controlled by Morgan Stanley Private Equity Asia (MSPEA), Thursday announced here the signing of a definitive agreement to acquire shares in Anhui Conch Cement Company Limited (Conch), Chinese mainland’s largest cement company.

According to MS Asia Investment, an investor consortium led by MSPEA will acquire a 14.3 per cent stake in Conch from its parent company Anhui Conch Group. The investment is subject to approval by various government bodies and regulators in the mainland.

The consortium also includes the International Finance Corporation, the private sector arm of the World Bank Group. Anhui Conch Cement Company Limited is the largest cement producer in mainland.

MS Asia Investment Ltd, a unit of Morgan Stanley, will take a 10.51 per cent stake and the World Bank Group’s private-sector arm, the International Finance Corp., will take 3.82 per cent.

The statement didn’t say how much the two investors will pay for their stakes. However, the deal involves the transfer of non-tradable shares from the company’s controlling shareholder, China Anhui Conch Group, to the two investors. Anhui Conch Cement is still in the process of floating its non-tradable shares.

China Anhui Conch Group will retain effective control of the firm with a 35.24 per cent stake after the deal, which still requires approval from China’s regulators.

In October, the IFC issued CNY1.13 billion in panda bonds, or yuan-denominated bonds sold in China, and earmarked CNY650 million for Anhui Conch Cement.

Shanghai Securities News reported Thursday the money was loaned to Anhui Conch Cement to help it become more energy efficient and to improve its financial structure.

Anhui Conch Cement Co. Ltd. gained 3.6 per cent to close at 9.90 yuan on the 28 December after the dual-listed firm said Morgan Stanley and the World Bank’s International Finance Corp had agreed to take a combined 14.3 per cent stake.

A full report on Anhui Conch is included in the January 2006 issue of International Cement Review which follows an extended editorial visit by ICR in November 2005.