Hong Kong-based hedge fund Infini Capital Management has completed the purchase of additional shares in China Ruyi Holdings, narrowly avoiding a sizeable financial penalty linked to a delayed private placement, according to a report by Bloomberg.
Infini bought 400 million shares in the Tencent-backed streaming media group on Thursday, meeting a previously agreed deadline and sidestepping potential liquidated damages of HKD320m, according to a filing with the Hong Kong stock exchange. The shares were acquired through a scaled-back private placement at a revised price of HKD2.60 per share.
The transaction follows a series of amendments to an agreement first struck in late July, when Infini agreed to acquire up to 1.3 billion Ruyi shares at HK$3 apiece, a deal that would have made the hedge fund a 7.5 per cent shareholder. Infini completed an initial tranche of 390 million shares in August, but subsequent market weakness prompted repeated revisions to both the size and pricing of the remaining purchase.
By early November, the outstanding number of shares had been reduced to 800 million, with the price lowered to HKD2.60. Earlier this month, the two sides agreed to further cut the final tranche to 400 million shares and imposed a 19 December completion deadline, after which Infini would have been required to pay the penalty.
Infini is led by former Morgan Stanley banker Tony Chin and has attracted market attention this year for agreeing to act as sole buyer in private placements for five Hong Kong-listed companies within a short period. The firm has completed similar deals with SenseTime Group, Beijing Fourth Paradigm Technology, GCL Technology Holdings and Ruyi, while its commitment to Weimob remains only partially fulfilled. Several of the stocks involved have since traded below their agreed placement prices.
China Ruyi’s shares closed at HKD2.27 on Friday, below both the original and revised placement prices. Under the latest terms, Infini’s holding would equate to around 4.7 per cent of the company, alongside Tencent, which remains a significant shareholder with a stake of about 15 per cent.
