Ports sells stake to Oriental Fortune

Chinese private equity company Oriental Fortune has agreed to purchase a 20 per cent stake in Hong Kong listed Ports HK.

Ports HK is the subsidiary of Ports BVI which owns substantially all of the group’s existing fashion and apparel business and is seeking to exit the apparel and fashion business.

A Framework Agreement signed by both parties provides for Oriental Fortune to introduce an independent third party buyer to acquire the remaining 80 per cent 90 days after the first deal is settled.

The 20 per cent stake will carry a cash price of HK$600 million (US$77.35 million).

Ports plans to use the proceeds from the 20 per cent sale for investment in “related sectors of the PRC economy”.

At this stage, no legally binding agreement has been reached regarding acquisitions, and Ports BVI says it will make further announcements relating to reinvestment later.

Ports BVI is currently controlled by private equity group Blackstone, CFS and PIEL who, combined, hold 79.3 per cent, and have agreed to the sale.

The vendor says management consider the future prospects of the traditional fashion and apparel business are “difficult and challenging”, reflected in the downward trend in the company’s financial performance over the last few years.

“The downward trend has been caused by various factors, including consumers’ move from traditional retailing to internet purchases and the macro political environment in the PRC,” Ports BVI said.

The company says shareholders’ interests would be better served by the company reinvesting in other areas of the PRC economy which provide shareholders with a better return.

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