Haier Smart Home plans Hong Kong listing to take $7.7bn unit private

The Haier group was founded in 1984 by Chinese businessman Zhang Ruimin. (Reuters)
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Updated 12 December 2019

Haier Smart Home plans Hong Kong listing to take $7.7bn unit private

  • Haier Smart Home would offer minority shareholders in unit Haier Electronics Group newly issued Hong Kong stock for their shares
  • Haier Electronics makes and sells appliances such as washing machines

HONG KONG: Haier, the world’s biggest maker of household appliances, is planning a major restructuring that will see its main unit Haier Smart Home list in Hong Kong to take another group company valued at $7.7bn private, two people with direct knowledge of the matter said.
Under the deal, Haier Smart Home, formerly known as Qingdao Haier and already listed in Shanghai, would offer minority shareholders in unit Haier Electronics Group newly issued Hong Kong stock for their shares, they said.
Financial advisers have been hired to work on the deal, which would give Haier Smart Home access to cash at Haier Electronics, the sources said, declining to be identified as negotiations were private.
Haier Electronics, which makes and sells appliances such as washing machines, held about 20bn yuan ($2.8bn) in cash and short term investments as of end-June, according to Refinitiv.
One of the sources added the plan was also part of the Haier group’s efforts to streamline its overseas operations.
Haier Smart Home currently owns 45% of Haier Electronics and unlisted parent Haier Group Corp. holds 12%, while minority shareholders include Vanguard Group, Norges Bank Investment Management and BlackRock, according to Refinitiv data.
The plan is still preliminary and would be subject to regulatory approval, the sources said, adding that the aim was to complete the deal in the second half of next year.
A representative from Haier Smart Home’s investors relations office said the team was not aware of the plan. Haier Group and Haier Electronics did not respond to requests for comment.
The Haier group was founded in 1984 by Chinese businessman Zhang Ruimin who built up a small loss-making factory into a major consumer brand. Major acquisitions have included New Zealand appliances brand Fisher & Paykel in 2012 for NZ$927 million and the $5.6bn purchase of General Electrics’ appliances business in 2016.
Haier Smart Home, which has a market value of some $15.4bn, also listed in Germany last year — the first listing of a Chinese company under the D-share program aimed at increasing foreign investment in Chinese firms.
Hong Kong-listed companies have announced a record 24 take-private deals this year, often citing uncertain market conditions or undervalued shares as reasons for the deals.

White House ‘planning US Treasury coronavirus bond’

Updated 07 April 2020

White House ‘planning US Treasury coronavirus bond’

  • Two European Commissioners urge Germany to agree to EU issuing joint debt to fight crisis

WASHINGTON: White House advisers have been discussing the possibility of a coronavirus-related US Treasury bond, US President Donald Trump’s economic adviser Larry Kudlow said on Monday.

Kudlow said this was a time to sell bonds to raise cash for coronavirus relief efforts and a “war bond” was a great idea.

“We’re just looking at it ... let’s see where it leads,” he told reporters at the White House.

He embraced the idea earlier in an interview with CNBC.

“This would be a long-term investment into the future of American health, safety and the economy,” Kudlow told CNBC. 

“From my standpoint, technical considerations aside, I think the concept is exactly right.”

Kudlow also said he does not think the Federal Reserve was finished with its efforts to help mitigate the impact of coronavirus.

Asked if there were discussions about a plan to deal with businesses that are not investment grade but have more than 500 employees, he told CNBC: “People calling us and emailing us and so forth. I know Secretary Mnuchin is looking very carefully at that.” 

Also on Monday, two European Commissioners urged Germany to agree to the EU issuing joint debt to fight the coronavirus crisis, as wealthy northern nations remain reluctant to back so-called coronabonds.

“Like the European Central Bank in the monetary and financial sphere, the member states must now prove their joint decisive and innovative spirit,” internal market commissioner Thierry Breton and economy commissioner Paolo Gentiloni wrote in the Frankfurter Allgemeine Zeitung (FAZ) daily.

That could take the shape of “a European fund whose explicit function would make possible issuing long-term bonds,” Breton and Gentiloni suggested.

“Strictly limited to collective investments for industrial revitalization in the context of the current crisis,” the instrument would be proof of “unshakeable solidarity” among EU nations, they argued.

A group of states including southern European heavyweights Italy, France and Spain have been imploring northerners like Germany, Austria and the Netherlands for common debt facilities to cushion the economic impact of the virus.

But conservative politicians in the north fear the plans would mean the eventual mutualization of all sovereign debts and their taxpayers footing the bill for supposed southern profligacy. Finance ministers from the 19 euro single currency member states will meet on Tuesday to again seek a solution to the deadlock.

Germany’s Olaf Scholz on Friday proposed a three-pronged scheme including cheap loans from the financial crisis-era European Stability Mechanism (ESM), cash from the European Investment Bank and an EU-wide unemployment reinsurance scheme, skirting the issue of joint debt.

And EU Commission President Ursula von der Leyen on Friday promised a post-crisis “Marshall Plan” for the bloc funded through its existing joint budget, whose next seven-year period runs from 2021-27.

Responding to Scholz’s plans, Breton and Gentiloni argued Monday that a “fourth pillar” of financial aid would be needed to master the crisis, “given the size of the sums involved.”

Also in the FAZ and France’s Le Figaro Monday, Bundestag (German parliament) president Wolfgang Schaeuble and his French counterpart Richard Ferrand called for “more solidarity and fiscal integration” in Europe.