<article><a style="color: #000080;" href="http://www.honycapital.com/?l=en-us" target="_blank">Hony Capital</a>, an affiliate of <a style="color: #000080;" href="http://www.dealstreetasia.com/?s=Lenovo+Group" target="_blank">Lenovo Group</a>, is selling its stake in <a style="color: #000080;" href="http://www.dealstreetasia.com/?s=Happigo+Home+Shopping" target="_blank">Happigo Home Shopping</a>, a subsidiary of <a style="color: #000080;" href="http://www.dealstreetasia.com/?s=Hunan+Broadcasting+Group" target="_blank">Hunan Broadcasting Group</a>.</article>

<a style="color: #000080;" href="http://www.honycapital.com/?l=en-us" target="_blank">Hony Capital</a>, an affiliate of <a style="color: #000080;" href="http://www.dealstreetasia.com/?s=Lenovo+Group" target="_blank">Lenovo Group</a>, is selling its stake in <a style="color: #000080;" href="http://www.dealstreetasia.com/?s=Happigo+Home+Shopping" target="_blank">Happigo Home Shopping</a>, a subsidiary of <a style="color: #000080;" href="http://www.dealstreetasia.com/?s=Hunan+Broadcasting+Group" target="_blank">Hunan Broadcasting Group</a>.
At the same time, it is partnering with the firm to raise a fund between RMB2 billion and RMB2.5 billion, two separate regulatory filings show.
Happigo Home Shopping&#8217;s three investors viz., Hony, CITIC Private Equity and Sequoia Capital China are all set to exit.
According to <a style="color: #000080;" href="http://www.cninfo.com.cn/cninfo-new/disclosure/szse_gem/bulletin_detail/true/1202051701?announceTime=2016-03-17" target="_blank">this filing</a>, Hony plans to sell its 18.5 per cent stake, and CITIC will offload a similar-sized interest. Sequoia plans to sell 4.5 per cent. Happigo went public last year.
Hony Capital is sponsored by Legend Holdings, the parent of the Hong Kong-listed Lenovo Group, the world&#8217;s number one PC manufacturer.
Happigo sells consumer goods through TV shows and its e-commerce platform. It is owned by Hunan Broadcasting Group, the broadcast and film group that is China’s second most viewed after CCTV, and which also operates Mango TV. The group signed a multi-faceted alliance with Hollywood studio <a style="color: #000080;" href="http://www.dealstreetasia.com/?s=Lionsgate" target="_blank">Lionsgate</a> last year.
Happigo had a net profit of RMB95 million in 2015, a fall of 38 per cent from the previous year.
However, Hony is not leaving Happigo although the nature of their partnership will change.
In <a href="http://www.cninfo.com.cn/cninfo-new/disclosure/szse_gem/bulletin_detail/true/1202048115?announceTime=2016-03-16" target="_blank">a separate filing</a>, Hony said it is raising a new consumer-focussed fund with Happigo and Mango TV, with a closing target of between RMB 2 billion and RMB2.5 billion. Happigo has already put in RMB79.6 million, while Mango TV and Hony have each invested RMB59.7 million. The rest will be raised from external investors.
Hony, CITIC and Sequoia had entered Happigo in April 2010, with a cumulative investment of RMB330 million, making it the largest PE financing deal at that time in China&#8217;s TV shopping sector. Hunan TV had retained a controlling stake after the financing deal.
Hony Capital is also raising its eighth fund, which <a style="color: #000080;" href="http://www.dealstreetasia.com/stories/33918-33918/" target="_blank">reached first close</a> of $1.25 billion last year and aims to raise double of that. The firm is also raising a $600 million co-investment side vehicle that allows LPs to participate in cross-border transactions outside of China.
The fund will invest in mainland China, Hong Kong and Taiwan. Half of the funds will be deployed in state-owned enterprises that require reorganizing in private and public markets. It will also invest in private firms in distress or undergoing restructuring.
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Hony Capital, an affiliate of Lenovo Group, is selling its stake in Happigo Home Shopping.

China: Hony Capital to exit Happigo, form partnership to raise new consumer-focussed fund

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China: Hony Capital to exit Happigo, form partnership to raise new consumer-focussed fund

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