Tianjin in talks to sell stakes in two state-owned units to TCL

Twilight over Tianjin.

The government of Tianjin is in early talks to sell stakes in two of its listed technology firms to Chinese consumer electronics giant TCL Corp., according to people familiar with the matter.

The discussions involved holdings in chip devices maker Tianjin Zhonghuan Semiconductor Co., and Tianjin Printronics Circuit Corp., a printed circuit board producer, the people said. Tianjin’s government and TCL are still exploring options including direct stake sales or having the electronics company acquire control in the major shareholder of the two listed firms, said the people, who asked not to be identified as the discussions are private.

Tianjin Printronics shares erased earlier losses and rose as much as 5% in Friday afternoon trading in Shenzhen, giving it a market value of 2.6 billion yuan ($378 million). Tianjin Zhonghuan, which has a market capitalization of about 40 billion yuan, rose as much as 2.6%.

Tianjin, a port city near Beijing, has one of the highest ratios of LGFV debt to GDP in China and has seen rating downgrades among several government-related entities. Tewoo Group Co., a major commodities trader based in Tianjin, recently became the biggest dollar bond defaulter among China’s state-owned companies in two decades.

TCL has been a strong backer of Tianjin’s efforts to restructure its debt and introduce private investment in state-owned companies. The Huizhou-based company in 2015 invested in Tianjin 712 Communication and Broadcasting Co., a communication equipment maker. TCL is the second-largest shareholder with a 19% stake in the firm, according to data compiled by Bloomberg.

In November, TCL signed a strategic cooperation deal with the Tianjin government that involves investments in industries from semiconductor to artificial intelligence, according to an announcement at that time. TCL also led the setup of a 10 billion yuan fund that supports high-tech startups in the city.

Tianjin Zhonghuan Electronic and Information Group Co., which is directly under Tianjin’s State-owned Assets Supervision and Administration Commission, holds a 28% and a 25% stake in Zhonghuan and Printronics respectively, according to data compiled by Bloomberg.

Deliberations are at a preliminary stage and may not lead to a transaction, said the people, who asked not to be identified as the information is private. Representatives for Tianjin government, TCL Corp. didn’t immediately respond to requests for comment, while representatives for Tianjin Zhonghuan and Tianjin Printronics said they have no information on the matter.

Bloomberg

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Following vacancies can be applied for (only in Singapore).   

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Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.