Reorient Group Joint Ventures $457 Million Investment Firm In Shanghai

By Staff Writer

Feb 06, 2016 04:10 AM EST

Reorient Group Ltd., a Hong Kong based versatile boutique investment firm, controlled by private equity fund, is going to form a joint venture in Shanghai, China. The joint ventured enterprise; Yunfeng Securities Co. aims to provide brokerage, investment-banking and asset management services in China.

The 3 billion yuan ($457 million) joint venture also includes Giant Investment Co. and Jiangsu YuWell Technology Development Co. Yunfeng Securities Co. will be based in Shanghai with a registered capital of 1 billion yuan. 43% stake in the joint venture firm will be owned by Reorient, 56% of which is owned by a unit of private equity fund Yunfeng Financial Holdings Ltd., reports Bloomberg.

The Joint Venture Agreement is scheduled to become effective upon the approval of the China Securities Regulatory Commission. Reorient Group will control majority of the board of directors of the JV company and it will be represented as a subsidiary of Reorient, reports AAStocks.

Registered capital of the JV company will be in shared by the entrepreneurs as Reorient- RMB 43,00,000,000, Giant- RMB 300,000,000  Jiangsu Co. RMB 270,000,000. Besides Reorient's 43%, 30% stake will beheld by Giant and rest 27% by Jiangsu Co., according to the Reorient statement preserved in AAStocks.

Yunfeng Financial, has reportedly been backed by Jack Ma, the Chinese business tycoon. He along with partners has bought control of Reorient in May.

Jack Ma is the chairman and founder of the $26.5 billion net worth enriched ecommerce company Alibaba Group Holdings Ltd. He controls Zhejiang Ant Small & Micro Financial Services Group Co.

However, Giant Investment Co. is controlled by Shanghai-based billionaire Shi Yuzhu. Giant has businesses ranging from computer networks to investment and asset management firms.

According to the proposed Memorandum and Articles of Association, the board of directors of the JV company will consist of 7 directors. Reorient, as the major stakeholder will nominate 5 directors while two directors from the two other partners. Reorient nominated director will act as the chairman of the board of directors for the JV firm.

The venturing partners will apply together to the China Securities Regulatory Commission for the establishment and regulatory licenses of the JV Company. Submission of the application will be followed by execution of the Joint Venture Agreement. The application will be supported by the articles of association of the JV entity.

A Shanghai based JV firm with 3 billion yuan fund is going into operations subject to receipt of approval from the regulatory authorities. Yunfeng Securities Co., the proposed joint venture entity aims to invest in brokerage, investment-banking and asset management services in China. Jack Ma, the Chinese business tycoon will hold the controlling responsibility for Yunfeng. 

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