Chemicals, oil and fertiliser conglomerate Sinochem plans to raise RMB1bn ($143m) for a China-based fund targeting new energy, materials, and chemicals for the electronics industry, DealStreetAsia has reported.
Agreements for the fund are still to be formalised. The corporate will begin investing once it has secured 50% of its overall target as a first close, with the other half to be raised over the following 12 months.
Founded in 1950, Sinochem primarily produces refined chemical, fertiliser and oil-based products. About 80% of the capital raised for the fund will be invested in energy, materials and electronic chemicals, areas strategically aligned with its operations.
Sinochem is committing up to $28.5m to the fund through its Sinochem Capital Investment Management subsidiary. An unnamed investment manager, in which Sinochem owns a 40% interest, will manage the fund’s activities.
The vehicle’s other limited partners include specialised chemical supplier Hubei Xingfa Chemicals, which will supply up to $42.3m, and two unnamed state-backed funds in Hubei province that are each providing up to $27.8m.
The Hubei funds are committing the financing on the condition that at least 60% of the fund’s overall capital is deployed in the province, and at least 40% in the city of Yichang. The vehicle will be able to invest up to roughly $29m per deal.