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TPG agrees to sell China leasing business to Haitong for $715 mln‑Reuters

(Reuters) – Global private equity firm TPG Capital has agreed to sell its China leasing business UT Capital Group Co Ltd to Haitong International Holdings, a unit of Haitong Securities, for $715 million, the two companies said in separate statements on Wednesday.

U.S.-based TPG, with $55.3 billion in assets under management, hired Morgan Stanley and UBS, to sell the business in April, Reuters previously reported.

The acquisition of UT Capital gives China securities firm Haitong the ability to lend to China’s small and mid-sized enterprises, which struggle to get loans from China’s big banks.

“Leasing is a very effective financial service to support our country’s SME as well as high-tech and private business growth. It also perfectly matches with our government’s national developing strategies and economic restructuring plan,” said Wang Kaiguo, chairman of Haitong Securities.

UT Capital’s main operating subsidiary, UniTrust Finance & Leasing Corp provides equipment leasing services to SMEs in the construction, medical, education and technology industries, among others. China’s 4.3 million SMEs account for 60 percent of China’s GDP and 75 percent of new jobs created in the country.

UniTrust’s assets grew from 4.4 billion yuan ($718.84 million) to 10.5 billion yuan between 2010 and 2012, and net assets reached 2.348 billion at the end of June, TPG said in its statement.

TPG acquired 100 percent of the business in 2008.

A successful exit could boost TPG’s fund raising efforts in Asia. The buyout fund has been struggling to raise a $5 billion fund since its launch in late 2011, while rival KKR & Co raised $6 billion and closed its fund in July this year after launching in January 2012.
Credit Suisse advised Haitong on the acquisition.