CNEI makes ten times return on Liyuan Aluminum float

Beijing based growth capital firm China New Enterprise Investment has made a ten times return on Liyuan Aluminum Group, a Chinese manufacturer of aluminum extrusion products, as it exits the company through a Shenzhen IPO.

The stock closed at CNY 44.6 per share on the first trading day up 27.4% from its IPO price a sign of bullish sentiment in the commodities markets.

Liyuan is the fifth largest aluminium processing company in China, itself the world’s major aluminium producer. The company produces the bodies of Volkswagen and Mercedes cars and the aluminium cases of Apple computers. It said that it plans to use the IPO proceeds to fund product research and development and production capacity expansion.

CNEI, which closed its second fund in March on USD 255 million, paid USD 7.5 million for 16% stake in Liyuan in July 2008. Based on recently closing price, CNEI’s investment is now worth USD 75.4 million representing a remarkable tenfold multiple on its original investment.

CNEI’s investors are mainly outside China and include Lloyds Development Capital but the firm is unusual in denominating its funds in Chinese currency.

(Sourced from AltAssets.com)

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