Dairy company backed by big Wall Street investors goes bust

08:54, April 15, 2010      

Email | Print | Subscribe | Comments | Forum 

Chinese dairy products maker Taizinai, which counts Goldman Sachs and Morgan Stanley among its investors and Citigroup among its lenders, has collapsed, leaving around 3 billion yuan ($440 million) in unpaid debt, sources familiar with the matter said on Wednesday.

Morgan Stanley, Goldman and private equity firm Actis Capital had paid $73 million for a 31 percent stake in Cayman Islands-registered Taizinai in 2007, with Morgan Stanley providing $18 million, Goldman $15 million and Actis Capital $40 million, sources said.

The Grand Court of the Cayman Islands appointed Hong Kong accountant Borrelli Walsh as provisional liquidator of the former high flyer, the South China Morning Post reported on Wednesday, citing documents it had reviewed.

The paper was the first to report the company's collapse.

Citigroup is Taizinai's biggest lender, while the company also owed money to Singapore's DBS and other banks, according to the sources.

Taizinai and Actis could not be reached for comment. The banks declined to comment.

The sources have direct knowledge of the matter but are not authorized to speak publicly about the matter.

Once an initial public offering candidate, Taizinai, best known for its probiotic yoghurt drinks, expanded quickly, but was hit hard by China's tainted milk scandal, which hurt dairy sales across the country.

Hunan-based Taizinai did not sell any contaminated products, but was hit by the industry downturn, one of the sources said.

With the tainted milk scandal and the over-expansion of its business, Taizinai was struggling, prompting the Hunan provincial government to take over the company in December 2008, according to a source familiar with the matter.

The local government had been managing and trying to stabilize the company since then, but was unable to make any real progress finding a solution, or a buyer.

The source said the liquidators have taken over the company, and will continue to try and seek a buyer.

As recently as the middle of last year, Taizinai was cited in Chinese media as a takeover target for Nestle SA, the world's biggest food group. A Nestle spokesman in China declined to comment about the matter at that time.

Source:China Daily

(Editor:黄蓓蓓)

  • Do you have anything to say?

双语词典
dictionary

  
Special Coverage
  • Premier Wen Jiabao visits Hungary, Britain, Germany
  • From drought to floods
Major headlines
Editor's Pick
  • On Sept. 26, a resident passes by a flower terrace decorated for the coming National Day. (Xinhua/Hang Xingwei)
  • The photo, taken on Sept. 26, shows the SWAT team ready for the joint exercise. (Xinhua/Wangkai)
  • Two metro trains in Shanghai collided Tuesday afternoon, and an identified number of passengers were injured in the accident, the Shanghai-based eastday.com reported. Equipment failures were believed to have caused the crash on the Line 10 subway, Xinhua quoted local subway operator as saying.
  • An employee at a gold store in Yiwu, located in east China's Zhejiang province, shows gold jewelry on Monday.(Xinhua/Zhang Jiancheng)
  • Tourists ride camels near China's largest desert lake Hongjiannao in Yulin, north China's Shaanx Province, Sept. 24, 2011. Hongjiannao is shrinking as a result of climate change and human activities, and may vanish in a few decades. Its lake area, which measured more than 6,700 hectares in 1996, has shrunk to 4,180 hectares. Its water level is declining by 20-30 centimeters annually and its water PH value has risen to 9.0-9.42 from 7.4-7.8. (Xinhua/Liu Yu)
  • Actors perform royal dance at the Gyeongbok Palace in Seoul, Sept. 27, 2011. A ceremony commemorating the 38th South Korea Sightseeing Day was held in Gyeongbok Palace on Tuesday. (Xinhua/He Lulu)
Hot Forum Discussion