Morgan Stanley Gets 2.27% of Its China JV Fund via Auction for USD3.7 Million
Liao Shumin
DATE:  Apr 11 2019
/ SOURCE:  yicai
Morgan Stanley Gets 2.27% of Its China JV Fund via Auction for USD3.7 Million Morgan Stanley Gets 2.27% of Its China JV Fund via Auction for USD3.7 Million

(Yicai Global) April 11 -- The Morgan Stanley International Holdings unit of New York-based global investment bank and financial service provider Morgan Stanley has gained a 2.27 percent stake in its China joint venture via an online auction for about CNY25 million (USD3.7 million).

The subsidiary will thus become the Shanghai-based JV's largest shareholder after the deal finalizes.

It grabbed this bigger slice of Morgan Stanley Huaxin Fund Management JV on e-commerce platform Taobao operated by Chinese tech titan Alibaba Group Holding.

MS Huaxin's predecessor was Jutian Fund Management, which formed in 2003, and in which Morgan Stanley invested in 2008. The biggest shareholder of MS Huaxin was China Fortune Securities with a 39.6 percent stake before the auction, with MS International Holdings in second with 37.36 percent, public data show.

The latter will thus overtake the Chinese securities brokerage to become the top dog when the transaction goes through. It plans to further raise its stake in the JV to 100 percent in coming years if regulators allow.

Guangzhou Intermediate People's Court held the sale on Taobao's online judicial auction from March 29 to March 30. Its target was 2.27 percent stake in MS Huaxin previously held by debtor company Shenzhen-based Zhongji Industrial Group, the auction notice shows.

The stake is valued at CNY14.4 million and the auction's starting price was CNY10 million. MS International Holdings bore away the bell for CNY25 million after 119 bids.

China Fortune Securities, MS International Holdings, China Merchants Finance Investment Holdings and Shenzhen Costone Venture Capital enjoyed pre-emptive rights in this auction, and all demanded their exercise. Morgan Stanley's main competitor raised its bid price slightly many times, until the US investment bank's unit upped the ante to CNY25 million after it touched CNY20 million, thus prompting its rival to fold.

Morgan Stanley also applied to the China Securities Regulatory Commission to set up a brand-new securities firm in which it will take a 51 percent stake in addition to its JV fund management company in China, it announced last year.

Editor: Ben Armour

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Keywords:   Morgan Stanley