BEIJING, Sept 22 – China Investment Corp (CIC), the country\’s 200-billion-dollar sovereign wealth fund, said Tuesday that it had agreed to take a significant stake in Hong Kong-based commodities firm Noble Group.
The investment in Noble — which has interests in a range of raw materials and natural resources from coal and iron ore to soybeans and sugar — will help broaden CIC\’s portfolio.
"As an investment company, you certainly have to diversify. It is impossible to put all your assets into one basket," CIC spokesman Wang Shuilin told AFP.
Noble said in a statement posted on its website that it would sell 573 million shares in a private placement to CIC for 850 million dollars.
The placement comprises 438 million new shares to be issued by Noble and 135 million existing shares indirectly held by "trusts associated with the interests" of chief executive Richard Elman, the statement said.
The price, at 2.1 Singapore dollars (1.5 US) a share, represents a discount of around 7.3 percent to the weighted average price of shares traded on September 14 and 15 before trading was suspended, it said.
Both sides said the deal required final approval from both boards of directors.
CIC\’s total stake in Noble Group will rise to 14.9 percent after the placement is completed, Dow Jones Newswires reported Tuesday, citing an unnamed source familiar with the matter.
The partnership between the two firms will see both "jointly (invest) in infrastructure assets and supply chain management related to agricultural commodities", Noble said.
The company added that the newly issued shares would give it the "additional capital to pursue strategic investments in key agricultural markets globally".
Noble\’s current agricultural activities include farm production in Argentina, Uruguay, and Brazil, as well as crushing plants and sugar refineries. It operates five port facilities throughout South America.