China will allow Goldman Sachs to buy a share in a local tool maker after it rejected two earlier plans for the US investment bank to buy into Chinese companies, a statement said on November13.
The China Securities Regulatory Commission gave the green light on November 12 for the 12.08-percent stake in Chengdu Yangzhiguang Industrial Co, Yangzhiguang said in a statement with the Shanghai Stock Exchange.
The purchase by Goldman Sachs was part of Shanghai-listed Yangzhiguang's plan to issue 370 million additional yuan-denominated A-shares to investors in a private replacement. Jade Dragon (Mauritius) Ltd, a wholly-owned unit of Goldman Sachs, is to buy 60 million A-shares at 3.99 yuan per share, representing 12.08 percent of Yangzhiguang's enlarged share capital, the company has said.
The approval came after two other applications by Goldman Sachs to gain shares in Chinese listed companies were turned down earlier this year by the regulators.
In August, regulators voted down an application Chinese home appliances maker Guangdong Midea Electric Appliances Co to sell a 10.7 percent stake to a unit of Goldman Sachs. Earlier this month, regulators blocked a plan filed by Fuyao Glass, a key auto glass producer based in south-east China's Fujian province, to sell 111.3 million new shares to a private equity investment arm of Goldman Sachs.
Industry experts said the main reason why regulators rejected the deals was the selling prices agreed upon last year were seen as too low compared with their market price, as China's stock market has nearly doubled so far this year. Shares of Chengdu Yangzhiguang closed down 5.92 percent at 27.0 yuan on November 13.
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