On the evening of October 21st, CITIC Group announced on the Hong Kong Stock Exchange that its wholly-owned subsidiary had entered into a share purchase agreement with Trustar Fast Food Holdings Limited. Accordingly, CITIC Group agrees to sell and the buyer agrees to purchase 19.23% equity of Fast Food Holdings Limited. The buyer will also bear an outstanding shareholder loan worth approximately $74 million, with a total consideration of $430 million for the sale. After the sale is completed, CITIC Group will no longer hold equity in FFHL.
The announcement states that Trustar Fast Food Holdings Limited is a newly established fund wholly owned by a wholly-owned subsidiary of Xin Chen Capital Partnership Limited as a general partner. Xinchen Capital is a private equity subsidiary of CITIC Capital Holdings Limited.
As of the date of this announcement, CITIC Holdings indirectly holds 19.23% of the equity of FFHL, while FFHL directly holds Grand Foods Holdings Limited ("GFHL"), which holds 52% of the equity of McDonald's mainland China and Hong Kong business companies.
Regarding the reasons and benefits of this sale, CITIC Securities announced that based on the group's business development strategy, providing a good investment return for the group is in line with the group's interests. It is expected that this sale will not have any significant adverse impact on the operation and financial condition of the Group.
On the same day, CITIC Capital Holdings Limited also announced that its private equity investment business, Xinchen Capital, had signed an agreement with CITIC Group to acquire its shares in McDonald's Mainland China, Hong Kong, and Macau businesses (referred to as "McDonald's China"). After the transaction, the CITIC Capital consortium (including CITIC Capital and its private equity investment business, Xinchen Capital) remains the controlling shareholder of McDonald's China. This continuous increase also demonstrates the long-term confidence of the CITIC Capital consortium in McDonald's China business.
According to a report by The Paper, McDonald's China responded to the continued increase in investment by the CITIC Capital consortium, saying, "We are pleased to see that based on our firm optimism about the growth prospects of the Chinese economy and consumer market, as well as the development potential of McDonald's China, CITIC Capital's private equity investment business, Xinchen Capital, has increased its investment in McDonald's China. This transaction will further simplify our equity structure. Our vision of 'stronger, smarter, and better' to reach 10000 restaurants remains unchanged, and with the support of our shareholders, we will continue to promote the future development of McDonald's China
According to Tianyancha, CITIC Capital Holdings Limited was established in 2002 and is located in the Hong Kong Special Administrative Region. It is a company mainly engaged in securities brokerage, distribution, and securities issuance.
The operating entity of McDonald's China is Golden Arches (China) Co., Ltd., established on December 7, 1993, with a registered capital of 110 million US dollars. The registered address of the enterprise is located in Xuhui District, Shanghai, and its business scope includes investing in areas allowed by the state for foreign investment in accordance with the law, providing the following services to its invested enterprises, its affiliates, and franchisees.
In 2017, CITIC Capital and CITIC Group formed the CITIC Consortium and together with Carlyle, acquired 80% equity of McDonald's China for $2.08 billion. Among them, CITIC Group holds 52% of the equity of McDonald's China, officially becoming the controlling shareholder of McDonald's China. At that time, McDonald's (China) Co., Ltd. was renamed Golden Arches (China) Co., Ltd.
Source: Read and Create Finance