TPG Capital, the US private equity firm is selling off UniTrust Finance and Leasing Corp of China for US$800 million. It has hired Morgan Stanley and UBS to manage the sale according to individuals with knowledge of the transaction.
Many banking and non-banking institutions from Japan, Australia and Europe would be expected to bid for UnitTrust. UniTrust conducts business for equipment leasing finance for companies in many industries. The bidders would be attacted by the market for SME's, which has failed to obtain loans from China's major banking institutions. Overall, the 4.3 million SMEs to account for 60% of the country's GDP and accounts for 75% of the jobs created in mainland China.
The equity firm was able to obtain the controlling stake in the Chinese firm as part of the investment undertaken by Nissan Leasing of Japan back in 2008.
Amongst the competition for the SME market would be Far East Horizon, which is backed by KKR. Far East has a market valuation of US$2.2 billion according to data from Thomson Reuters.
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