2011-08-03 09:05

A man walks past washing machines of Panasonic Corp and its Sanyo Electric unit displayed at an electronics store in Tokyo.[Photo/Agencies]

Buyout firm Carlyle Group agreed to buy 9 percent of Haier Electronics Group Co Ltd (HEG) through convertible bonds, raising its stake in a Chinese company expanding into Japan and China's untapped markets, Reuter reported Tuesday.

The deal comes days after Haier decided to buy Panasonic Corp's Sanyo Electric washing machine and refrigerator units in Japan and Southeast Asia for $130 million.

Carlyle said it will invest up to $194 million in HEG, a Hong Kong-listed subsidiary of white goods firm Haier Group, China's largest maker of washing machines and water heaters.

"It is a positive deal for the listed company as it secures a funding channel to finance its expansion," said Andrew To, head of research of Emperor Capital Group. "It is getting tougher to obtain financing in the Chinese mainland especially for a highly competitive market," he said.

Carlyle, which has invested more than $3 billion in China, was likely to have been attracted by the rapid growth in China's consumer driven industry, analysts said.

Carlyle will have a seat on the company's nine-member board.

Carlyle's deal follows US private equity firm Kohlberg Kravis Roberts & Co's announcement on Monday to invest $114 million in China waste water treatment firm United Envirotech Ltd via convertible bond.

The advantage of a convertible bond for the company is it gets an immediate injection of capital, while the investor agrees to buy its stock at a higher price in the future. The investor receives a coupon from the bond until the strike price is hit, when it can call the bond and convert it to shares.