Chinese appliance maker Haier Group is expected in the next few days to finalize a long-discussed plan to inject its white-goods manufacturing unit into Hong Kong, China-listed Haier-CCT Holdings Ltd., sources close to the matter said.
The deal will likely involve the injection of Haier's 40-percent stake in Qingdao Haier Refrigerator Co., China's largest manufacturer of white goods, into Haier-CCT in a U.S. $200-million transaction.
The transaction was first reported in the Financial Times, although it has been in the works for more than a year.
Such a move would result in Haier Group raising its stake in Haier-CCT from about 30 percent now to a controlling level, dislodging CCT Telecom Holdings Ltd., which currently controls Haier-CCT with a stake of about 46 percent.
"The deal should be finalized in the next few days," said one source familiar with the situation.
The Hong Kong Stock Exchange said in January that it would treat backdoor listings as new listings from March 31, 2004, and Haier's backdoor listing seems planned to beat that deadline. Regulators have come to frown on backdoor listings in recent years as they are an effective means of escaping the scrutiny imposed on ordinary listing candidates.
Since the announcement made by the exchange, there have been two major backdoor listing transactions: one by a firm controlled by Li Ka-shing, said to be Asia's wealthiest man, and one involving his youngest son, Richard Li, as the biggest shareholder.
Haier Group's backdoor listing was first proposed more than a year ago, when the group applied to the Qingdao planning commission to inject part or all of its white goods assets into Haier-CCT, according to a newspaper report.
The shares of Haier-CCT have been suspended from trading in the Hong Kong Stock Exchange since March 8 pending a notifiable transaction, according to a stock exchange statement.
Sources said investment bank CSFB is advising Haier Group while Deutsche Bank is advising Haier-CCT.
Spokesmen from both investment banks declined to comment. (Dow Jones)
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