| HONG KONG
HONG KONG Dec 1 China National Chemical Corp
(ChemChina) is setting up a fund that will aim to raise $5
billion to help finance its purchase of Swiss seeds group
Syngenta, two sources with direct knowledge of the
matter told Thomson Reuters publication Basis Point.
The financing structure entails investors committing to the
fund, which would in turn own equity in Syngenta, the people
said - a move that would help ChemChina lower the debt burden of
its planned $43 billion acquisition.
Overall, ChemChina is targeting about $25 billion in equity
commitments to help fund the largest ever foreign purchase by a
Chinese firm, the people added.
Sources have previously said it has $32.9 billion in total
debt commitments arranged with Chinese and international
lenders. That level of gearing is, however, viewed as too high
for comfort by lenders, investors and analysts alike.
ChemChina has hired state-run Postal Savings Bank of China
(PSBC) to arrange the fund, the people added. The
mandate is a coup for the bank as it only set up its investment
banking department about a year ago.
The sources declined to be identified as the discussions are
confidential. Representatives for ChemChina did not respond to
telephone and emailed requests for comment. PSBC declined to
In addition to the planned fund, ChemChina has secured $5
billion in equity from Feng Xin Jian Da LP, a fund managed by
CITIC Trust Co Ltd, a unit of conglomerate CITIC Ltd, sources
have previously said.
It was not immediately clear in what other ways ChemChina
aims to boost the equity financing portion of the deal.
(Reporting by Carol Zhong at Basis Point; Additional reporting
by Aizhu Chen in BEIJING and Julie Zhu in HONG KONG; Writing by
Denny Thomas; Editing by Prakash Chakravarti and Edwina Gibbs)