HONG KONG: RRJ Capital, run by former Goldman Sachs Group Inc’s partner Richard Ong, is in advanced talks with the embattled HNA Group Co to lead a US$4bil investment in Ingram Micro Inc, people familiar with the matter said.
The group led by the Hong Kong-based private equity firm will invest through an HNA bond that can be converted into close to 50% of Ingram Micro’s shares, the people said, asking not to be identified before the agreement, which may be signed as early as next week.
The bond proceeds will be used to pay down a loan taken by HNA from Chinese banks for the acquisition of the US networking and software distributor, the people said.
Officials at RRJ and HNA declined to comment, while Ingram Micro didn’t immediately respond to queries after regular office hours.
HNA has faced an uphill struggle to fix its bloated debt load despite agreeing to sell more than US$25bil in assets since the start of 2018.
In April, creditors of the firm took the extraordinary step of seizing golf courses and other assets after a unit reneged on a loan payment. With the ongoing US trade disputes with China, the reduction of Chinese ownership in Ingram Micro is expected to help the consortium win the approval of the Committee on Foreign Investment in the US, one of the people said.
The funds of RRJ don’t include Chinese investors, with two thirds of its funds coming from North America and Europe, and the rest pooled from Asia and the Middle East, the person said. RRJ’s investment in Ingram Micro began more than a year ago, when it bought preference shares held by two special purpose vehicles that put the private equity firm in a position to invest more if HNA decides to dispose of the US company and another asset, according to people familiar with the matter at the time.
RRJ began buying HNA’s overseas assets when the debt-laden Chinese conglomerate started to restructure its business more than a year ago. In April, the private equity firm completed the purchase of Gategroup Holding AG in a deal that valued the airline catering company at US$2.8bil. — Bloomberg