Kung fu star Jet Li leads group in $187 million HK ‘shell’ deal
HONG KONG – A group led by Chinese movie star Jet Li and his wife Nina Li invested $187 million in a Hong Kong-listed firm, as appetite surged for so-called “shell” companies listed in the city.
The duo made the bulk of the investment, agreeing to buy 11.5 billion new shares of Far East Holdings International Ltd at HK$0.10 each, or about HK$1.15 billion ($148.4 million), via a holding company, according to filings with the Hong Kong stock exchange this week. That is equivalent to a 97 percent discount to Far East’s closing price on June 26, before the stock was halted pending an announcement.
Private companies and individuals are rushing to cash in on a steady flow of Chinese funds that have fueled a rally Hong Kong stocks, by snapping up so-called listed ‘shells’. Typically, such shell companies get a large injection of cash and assets that often change their business.
Demand for shell companies, entities which usually have few material operating assets, has soared in recent months. Such deals are generally considered a quicker and easier way for investors to gain a listing and access to funds than going through an initial public offering.
Li, better known for his acrobatic martial arts films, and his wife bought the stake on July 10 through Regent Pacific Business Ltd, the filings showed.
Far East didn’t immediately return a Reuters request for comment on the investments.
Fast East describes itself as an investment holdings company active in the technology, media, manufacturing and financial services sectors, according to its website.
The Far East deal follows a similar transaction last month by China’s largest China’s No.1 social network and online media company Tencent Holdings Ltd and developer Evergrande Real Estate Group to buy a loss-making solar panel maker. – Reuters