CHINA’S leading heavy machinery maker Sany Group plans to spin off four business units and is looking to rope in private equity (PE) firms as investors for the deal that could fetch a total of US$2 billion, sources said. Sany’s advisers have reached out to firms such as global investment powerhouses Bain Capital, Carlyle Group, CVC Capital Partners and KKR & Co. for the deal, the sources said, adding the first round of bids were due in the coming days. The firm’s hunt for a deal comes at a time when Asia has become a major battleground for global financial sponsors. A total of 342 funds raised a combined US$107 billion in the region last year, according to data provider Preqin. In China particularly, financing activity is expected to improve as the government pours funds into infrastructure projects and eases borrowing curbs on local governments to soften the blow to the economy from a mounting Sino-U.S. trade spat. Sany is looking to sell the units, including those making oil cylinders and gear reducers, individually or together, and use the proceeds to cut its debt, one source said. Founded in 1989 in Hunan Province, Sany is a diversified engineering machinery manufacturer, with products including concrete machinery, excavators, crawler cranes, truck cranes, pile driving machinery and road construction machinery. Debt at its Shanghai-listed entity amounted to 19 billion yuan (US$2.76 billion) by March, according to a bond ratings report. Sany Heavy Industry has a 56-percent debt-to-asset ratio and had three-times total debt to EBITDA in 2017.(SD-Agencies) |