A week after TPG swapped its 16.76 percent stake in Shenzhen Development Bank (SDB) for a 4 percent stake in Ping An Insurance, the US firm has reportedly sold a little over half its stake in the Chinese insurer through a block trade for $1.25 billion.
After a delay of almost a year, Ping An Insurance got regulatory approval to acquire TPG’s control stake in SDB just last week. The Chinese insurer acquired 520.4 million SDB shares held by TPG in exchange for about 299 million newly issued Ping An shares.
TPG has now sold 160 million of those shares or about 54 percent of its stake in Ping An at HK$60.60 per share (€6.2; $7.8), generating proceeds of HK$9.7 billion, according to the Wall Street Journal.
TPG was unavailable for comment at press time.
The divestment of part of its stake in Ping An gives TPG a return of almost 16 times return on 54 percent of its original $150 million investment in SDB through its Asian affiliate Newbridge in 2004.
The 2004 investment in SDB was a landmark private equity transaction as it was the first time a foreign investor had assumed a control stake in a Chinese bank. Since then, TPG turned the previously poorly performing bank’s fortunes around, increasing its assets by more than three times and reducing its bad loan ratio from 11.4 percent to 0.6 percent during the period of its investment, according to the Financial Times.