Chinese sovereign fund CIC buys 25 % in Shanduka for $245 mn

In its first investment in Africa, China Investment Corporation (CIC) has acquired a 25-per cent stake in South Africa's Shanduka Group, a resourses-focused investment firm, for R2 billion (Rs1,288 crore / $245 million).

CIC, the $410-billion sovereign wealth fund, bought the shares of Johannesburg-based company mainly from Old Mutual Private Equity and South African investment bank and asset manager Investec Ltd, which are selling their stakes.

"This partnership will allow us to jointly explore future investment opportunities in South Africa and other parts of Africa," said Cyril Ramaphosa, Shanduka's executive chairman, a freedom activist-turned-businessman who fought to end white-minority rule in South Africa, and widely regarded as a potential future South African president.

Shanduka, an unlisted investment holding company, whose investments encompass sectors including, energy, mining, telecommunications, financial services, property and beverages, this month took majority control of Shanduka Coal by acquiring 20.01 per cent stake from global commodity trader Glencore International Plc for R370 million.

The investment by CIC is for China to gain greater access in the resources rich region of Africa. The Chinese government is planning to give CIC additional funding of up to $50 billion in order to make investments in European companies, whose valuations have nosedived following the euro zone debt crisis, Reuters had yesterday reported.