Jade Road Investments Limited said it negotiated a partial divestment in Meize Energy Industries Holdings Limited.
Meize is a privately owned wind turbine blade manufacturer in China and is currently the thrid largest holding in Jade Road’s portfolio at 7.7% of net asset value.
The London quoted investment vehicle said it entered into a share purchase agreement for 112,500 Series B shares in Meize for a price of US$1.2mln.
Jade will receive payment in three tranches and will hold about 6.3% in Meize post divestment, with the number of shares sold representing 12% of its current holdings.
According to a statement, the company has already received the first tranche of US$400,000 and expects to receive the second and third payments in late July and August this year.
The transaction price implies a valuation of $10mln, which indicates a 22% premium to the carrying value as at the 30th of June 2021. The profit for the sale will be $300,000.
“Exiting private equity positions held in Chinese companies requires patience as well as persistence, but as demonstrated by this announcement, exits can be achieved, and in this case, at a premium to the value of the asset held in our books,” said John Croft, chairman of Jade Road.