China Investment Corporation (CIC), China’s $200 billion sovereign wealth fund, is buying A$500 million ($420 million; €292 million) of shares in embattled Australian logistics company Goodman Group as part of a wider A$1.8 billion effort to repair its balance sheet.
The Sydney-based group announced the news today. It also said it has formed a A$200 million joint venture with The Canadian Pension Plan Investment Board which would see the Canadian pension invest A$163 million. The venture would invest in mainland China.
Two months after it extended a A$200 million finance facility to the developer and fund manager, which has approximately A$18.1 billion of assets on its books, CIC will partner new and existing institutional investors in buying shares in the group at 40 Australian cents each reflecting an 18 percent discount to its last traded price.
Goodman’s chief executive officer, Greg Goodman, said the measure in addtion to the firm negotiating an extension on its deadlines for A$4.1 billion of debt, would enable the group to reduce its gearing.
The group posted a loss of A$1.12 billion in the year ended 30 June. Although it made an operating profit after tax of A$408 million, this was wiped out by write-downs across its portfolio of A$1.4 billion as well as losses on derivative trades and other non-operating losses.
Shares in Goodman were halted today at 49 Australian cents reflecting a market capitalisation of A$1.24 billion.