China Buys Equity Stake in Teck

China Investment Corp. (CIC), a China state-owned investment company headquartered in Beijing, and Teck Resources announced on July 3 that CIC would invest approximately C$1.74 billion in Teck through purchase by a wholly owned CIC subsidiary of 101.3 million Teck Class B subordinate voting shares. Following completion of the purchase, CIC will indirectly hold approximately 17.5% of Teck’s Class B Shares, representing 17.2% of Teck’s equity and 6.7% of the aggregate voting rights attaching to Teck’s Class A common shares and Class B Shares.

CIC advised Teck that it was acquiring its Teck interest for investment purposes as a long-term passive financial investor and would hold the shares for at least one year following closing.

CIC was established in September 2007, with an initial registered capital of $200 billion drawn from China’s foreign exchange reserves. The CIC Web site states that its mission “is to make longterm investments that maximize risk adjusted financial returns for the benefit of its shareholder” and that “because its financing is grounded in financial instruments and subject to commercial obligations, CIC maintains a strict commercial orientation and is driven by purely economic and financial interests.”

As featured in Womp 2009 Vol 06 -