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 NEW YORK, Sept. 10 /PRNewswire/ -- Alco Holdings Limited of Hong Kong and Blackstone Capital Partners L.P., a New York-based principal investment fund, have jointly announced that a subsidiary of Blackstone will invest a total of HK$120 million (US$15.5 million) in Alco in the form of two convertible notes. The first investment of HK$80 million (US$10.3 million) will be made in the next two weeks after receiving approval from the Hong Kong Stock Exchange and the second investment of HK$40 million (US$5.2 million) will be made in October, following a special general meeting which will be called to approve the issue of the second note. The notes will each have a five-year term and a 7.2 percent yield.
 The first note of HK$80 million (US$10.3 million) will be convertible into Alco common shares at HK$1.25 per share, representing an 0.8 percent discount to the market price of HK$1.26, as of Sept. 8, 1993. The second note of HK$40 million (US$5.2 million) will be convertible into Alco common shares at prices ranging from HK$1.25 to HK$1.35 per share.
 Alco is a leading consumer electronics manufacturer in China, with headquarters in Hong Kong. The company specializes in the production of audio products including CD radio cassette recorders, home stereo systems, and karaoke players. The company sells it products on an OEM basis to leading consumer electronics firms such as Aiwa, Hitachi, TEAC, Casio, Philips, Thomson, Goldstar and others. The company also sells its product to major retailers such as Kmart, Dixon, Canadian Tire and others. Alco's revenues and net income grew 82 percent and 67 percent, respectively, in fiscal year ended march 1993. Revenues totaled HK$1,086.5 million (US$140.2 million) and net income was HK$61.8 million (US$8 million).
 "Alco is proud to win the confidence of a major international institutional investor of Blackstone's reputation, and welcomes the investment by Blackstone," said Mr. Kimen Leung, chairman of Alco. "We believe that Alco will reap substantial benefits from a strategic relationship with Blackstone. In addition tot he capital to support our current expansion program, Alco will obtain greatly improved access to major U.S. and international customers." According to Mr. Leung, Alco will use the proceeds form the Blackstone investment to expand its production capacity and to fund its research and development efforts and working capital needs.
 Blackstone Capital Partners L.P. is a US$800 million (HK$6.2 billion) principal investment fund managed by The Blackstone Group, a leading international merchant bank founded by Mr. Peter G. Peterson, former U.S. Secretary of Commerce and former chairman of Lehman Brothers, Kuhn Loeb, and Mr. Stephen A. Schwarzman, former chairman of the Mergers and Acquisitions Committee of Lehman Brothers, Kuhn Loeb. Blackstone has focused much of its principal investment activity in partnerships with corporate management and also with such corporations as USX Corporation, Union Pacific Corporation, Time Warner, Inc., EDS Corporation, and Mitsubishi Corporation. In addition to principal investments, The Blackstone group acts as advisor to multinational corporations seeking to make overseas acquisitions and joint ventures, and has assisted clients in transactions with an aggregate value in excess of US$30 billion (HK$233 billion).
 Blackstone Capital Partners is committed to pursuing principal investments in Asia and has over US$200 million (HK$1.6 billion) of equity available for Asian investments. "We believe that the fast growing economies of Hong Kong and China offer excellent opportunities for investment," said Peter G. Peterson, chairman of The Blackstone Group. "We have a great deal of confidence in the continued success of Hong Kong companies both before and after 1997, and are seeking strictly friendly, long-term investments in order to assist and participate in their growth." Added Keith W. Abell, managing director of Hong Kong- based Blackstone Capital Partners Asia who is responsible for identifying Asian investment opportunities for Blackstone, "Alco has developed an exceptional international reputation for quality and service, and is expanding its customer base rapidly, especially among leading Japanese electronics companies and U.S. and European retailers. Furthermore, the company is positioned extremely well to benefit from the consumer spending boom in China. We are expecting outstanding performance from Alco and excellent results from our investment in the company."
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 /CONTACT: Stephen A. Schwarzman, president of Blackstone Group, 212-836-9824/

CO: Alco Holdings Limited; Blackstone Capital Partners L.P. ST: New York IN: FIN SU: TNM

SH-LG -- NY024 -- 0717 09/10/93 11:27 EDT
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Publication:PR Newswire
Date:Sep 10, 1993

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