KKR sells final stake in China Modern Dairy: source
Updated: 2014-09-02 14:39
Cartons of milk produced by Modern Farming (Group) Co Ltd, parent company of China Modern Dairy Holdings Ltd, are for sale at a supermarket in Beijing, China, October 4, 2012.[Photo/IC]
US private equity firm KKR & Co LP has sold its remaining stake in China Modern Dairy Holdings, raising around $80 million, a source with direct knowledge of the matter said.
KKR sold around 168 million shares at HK$3.70 per share versus Monday's closing price of HK$3.85, the source told Reuters on Tuesday.
China Modern Dairy announced interim after tax profit for the six months ended June 30 of 545 million yuan ($88.7 million), an increase of more than three times on the previous year.
KKR confirmed the sale without giving further details.
"We are very proud of the partnership we have had with Modern Dairy since 2007 in supporting their efforts to provide safe and healthy drinking milk to Chinese consumers," said Julian Wolhardt, Member of KKR.
Woldhardt added that KKR remains a believer in the long-term growth of China's dairy sector. The New York-based firm is an investor with China Modern Dairy and private equity firm CDH Investment in Asia Dairy, a dairy farm venture established in 2013 to meet China's rising demand for premium milk products.
KKR and CDH initially bought stakes in China Modern Dairy after the country's milk industry was battered by a 2008 scandal involving chemical-laced products. KKR paid $150 million in cash for a 34.5 percent stake.
After Modern Dairy's 2010 IPO and the sale of a stake to Mengniu last year, KKR almost tripled its original investment, Reuters previously reported.
China Modern Dairy grew its herd from 24,000 dairy cows and three farms to around 180,000 dairy cows and 22 farms during the five years after KKR and CDH invested.