China’s JD.com picks 10% stake in logistics operator for $115m

REUTERS/Jason Lee

By Mars W. Mosqueda Jr.

May 9, 2018

China’s second-largest e-commerce firm JD.com has paid HK$898.99 million ($114.55 million) to acquire a 10 per cent stake in Hong Kong-listed China Logistics Property Holdings (CLP), according to a Hong Kong stock exchange filing.

In the disclosure, CLP said JD.com, through its subsidiary JD Subscriber, has agreed to buy 321 million newly issued CLP shares at a price of HKD2.8 per share, representing a 9.42 per cent premium compared to the average closing share price for the ten trading days prior to 27 April.

JD Subscriber’s stock represents 9.90 per cent of CLP’s enlarged issued share capital. Immediately after the completion of the stake acquisition, the shareholding of CLP’s biggest shareholder, Yupei International Management, will drop to 24.29 per cent from 26.95 per cent, according to the filing.

The deal makes JD the third-largest shareholder of CLP, one of the biggest domestic logistic facilities developers and operators. Berkeley Asset Holding Ltd holds a 16.39 per cent share as the second-largest shareholder while Sherlock Asset Holding holds 0.40 per cent.

With the signing of the agreement, JD Subscriber gets the right to nominate one candidate for appointment to CLP’s Board as a non-executive director.

CLP said JD Subscriber and its affiliates are currently among the major tenants of the logistics facilities operated by the group.

“The investment by JD will enable CLP to achieve facilitation in site selection and network establishment, ensure a high occupancy rate, and improve gearing ratio and liquidity,” CLP disclosed.

The subscription of shares will also provide the logistics group with immediate funding, it added. Established in Shanghai in 2000, CLP now runs 60 logistic parks in China’s 42 cities.

On Tuesday, JD.com reported a 33 per cent increase in quarterly revenue, the slowest quarterly revenue growth since listing in the US. It posted Rmb101.1 billion ($15.88 billion) in revenue for the first quarter, higher than analysts’ estimate of Rmb98.9 billion ($15.52 billion).

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