LONDON (Dow Jones)–Private equity company Origo Partners PLC (OPP.LN) Friday said it agreed to raise up to $30 million in a share sale to fund new investments in China and Mongolia.
The money will be added to Origo’s existing cash resources to give it a war chest of up to $50 million to plow into investments in sectors like renewable energy, agriculture and mining, in a bid to exploit China’s rapid expansion and appetite for resources.
Origo said $10 million has been earmarked as seed funding for its recently-launched Origo China Sustainable Development Fund, a yuan-denominated fund set up with an $18 million anchor investment by China’s Xinxiang municipal government.
The fund is aiming to get an initial $75 million to invest in companies involved in making batteries for electric vehicles, recycling and other growth industries in China.
The remaining $40 million has been earmarked for six new investments Origo is close to finalizing, Chief Financial Officer Niklas Ponnert told Dow Jones Newswires.
Ponnert said he couldn’t be more specific at this stage, but added $20 million will be invested in the Chinese clean technology and agricultural sectors and $20 million will be invested in natural resources opportunities in Mongolia.
Ponnert said China’s rapid urbanization and its need to use resources better are spurring interest in clean energy and technologies devoted to managing waste and water.
And he said Mongolia, where Origo is interested in late-stage exploration companies with copper, gold or coal projects, or other investment opportunities, is attracting increasing investor interest because of its potential for exporting its resources to China.
Origo already holds a stake in Gobi Coal & Energy Ltd., a Mongolia-based coal company reported to be eyeing a $200 million initial public offering in Hong Kong.
Origo said new shares will be sold to institutional investors in a bookbuild, a type of share auction, to raise the new capital. The price at which new stock will be sold should be known later Friday.
It added investors have already indicated they are prepared to buy more than $25 million of new shares at about 25 pence a share, a 7% discount to Thursday’s close.
Also Friday, the company said it expects to report a net asset value for the year to Dec. 31, 2009, equivalent to 41 pence a share.
Ponnert also said Origo expects to bring in cash for further investments over the next 12 to 18 months by divesting maturing assets in its portfolio.
At 0814 GMT, shares in Origo were flat at 27 pence.
-By Jason Douglas, Dow Jones Newswires; 44-20-7842-9272; email@example.com