makes 9.5X return from Hand Enterprise
Capital Partners are pleased to announce that it had completed a
distribution of the entire proceeds from the sale of its stake in
Enterprise Solutions Co. Ltd ("HAND"). The original investment was US$3M
in 2007 and the distribution was US$28.7M or 9.5x return.
OWW originally invested in a wholly foreign-owned enterprise ("WFOE") Hand
Enterprise Solutions (Pte) Ltd in 2007. In 2009, the shareholders of
the WFOE restructured their shareholding into
HAND, a sino-foreign JV company in
China. HAND was subsequently converted into a joint stock company and
listed on CHINEXT (stock code: 300170) in February 2011.
As OWW was a substantial shareholder holding
more than 5% of HAND, it was subjected to a one year moratorium and
restrictions relating to the divestment of its shares. Depending on the domicile of entity used by the foreign
investor to hold the listed CHINEXT shares, different tax treatments can be
interpreted by the provincial tax authorities whose tax clearance were required for approval from the State Administration of Foreign Exchange
("SAFE") to remit the divestment proceeds in US$ out of China. Divestment
was carried out over a 6 months period but the bureaucratic processes
required a further 9 months.
HAND's revenue and profits for FY 2012 was RMB702M and RMB106M
respectively or an increase of 35% and 34% respectively over FY 2011. Its
market capitalization at 30 June 2013 was RMB4.2Bil compared to RMB1.5Bil
OWW has 2 other portfolio companies (one of which underwent the same
restructuring) applying for CHINEXT listing.