U.S. private equity firm Carlyle Grouphas raised by 20 percent its offer price for a reduced stake in China's Xugong Group Construction Machinery Co., as it seeks approval for the deal now worth about $228 million.

Carlyle has agreed to buy Xugong's shares at 2.41 Yuan per share, compared with 2.01 yuan it agreed to pay one year ago.

This is the second major concession Carlyle has made in its effort to obtain a stake in the key Chinese machinery maker. The U.S. firm agreed earlier this month to cut its planned purchase to 50 percent of Xugong, after originally agreeing to buy 85 percent for $375 million.

China's government has been reluctant to approve the deal because of concern that the country has been selling industrial assets to foreigners too cheaply.

The closely-watched Xugong deal has come amid a rush of private equity and venture capital investment from the United States and Europe, attracting to China's huge consumer market and economic growth.

Xugong Science & Technology Co. Ltd., Xugong Construction's listed unit, published a statement in the official China Securities Journal on Oct 24, saying its parent signed a new agreement with Carlyle last week.

Under the new agreement, Carlyle agreed to pay 1.217 billion Yuan ($154 million) to buy a 40.32 percent stake in Xugong Construction, and also agreed to pay 584 million Yuan ($74 million) to help the Chinese firm to expand its paid-up capital, according to the statement.

The two transactions, which still need regulatory approval, would allow Carlyle to own a half of Xugong Construction.

While the transactions were denominated in the Yuan currency, Carlyle has agreed to pay in U.S. dollars and the final amount for the deal could vary slightly due to different exchange rate, according to the statement.

Source:佚名