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The International Finance Corporation (IFC), the private arm of the World Bank Group, will buy a 10 percent stake in Changyu Group Co Ltd, a leading wine producer, if permission is granted.
The share transfer agreement between IFC and Changyu's shareholder Yantai Bureau of State-owned Assets Supervision and Administration Commission was signed on Wednesday, the wine maker's listed company said Thursday in a statement to the Shenzhen Stock Exchange.
According to the deal, IFC will pay 1.46 billion yuan (US$176 million) for the purchase.
The move is part of Changyu's plan to sell its State-owned shares.
Changyu Group, based in Yantai, Shandong Province, was previously owned by the local municipal government.
Last October, 45 percent of the shares in the Group were sold to newly-established Yantai Yuhua Investment Development Co through an employee and management buyout.
In February this year, the company agreed to sell another 33 percent stake to Italian firm Illva Saronno.
After the share transfer to IFC, Changyu Group will become a Sino-foreign invested joint venture, with the city of Yantai retaining a 12 percent stake, the company said in the statement.
But the deal is still to be approved by related government departments.
"The new shareholding structure will help drive the company's future growth," said Dong Junfeng, an industry analyst from Galaxy Securities.
The company has performed well in the domestic wine market. Its listed subsidiary Yantai Changyu Pioneer Wine Co reported year-on-year growth of 42 percent in its net profit for the first quarter.
(China Daily May 20, 2005)
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