Global Logistics Properties of Singapore announced it would invest 2 billion yuan (HK$2.5 billion) for a 15.3 per cent stake in China Materials Storage and Transportation Development, China's largest state-owned warehouse logistics provider, to become its second-largest shareholder.
The transaction will be funded entirely from proceeds of the investment in GLP by China Life Insurance, Bank of China Group and Hopu Funds. The three entered into an agreement with GLP in February to invest up to US$2.5 billion, with the first tranche completed in June, eventually taking about a third of a stake in GLP's China business.
"With the support and facilitation of the Chinese investor consortium, we are pleased to establish this strategic partnership with CMSTD, which will greatly strengthen our market-leadership position and boost our development pace across China," said Jeffrey Schwartz, the co-founder of GLP.
GLP has already formed strategic alliances with a number of Chinese companies, including Cofco, Sinotrans, Bank of China, Jinbei, and Guangdong Holdings, many of which are cooperation framework agreements.
GLP and CMSTD also plan to form a joint venture to be the exclusive developer of logistics facilities on land sourced by CMSTD in China. GLP will own a 49 per cent stake in the joint venture, with an option to increase its ownership to 50 per cent, while CMSTD will own the remaining 51 per cent stake.
The joint venture is expected to invest more than 3.6 billion yuan to develop up to 1.3 million sqmetres of buildable area on CMSTD land reserves.
This article appeared in the South China Morning Post print edition as: GLP takes stake in warehouse provider
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