Hong Kong-listed enterprise management software firm Kingdee International Software Group has entered a share subscription agreement of up to HK$1.6 billion ($204.9 million) with a subsidiary of Qatar Investment Authority (QIA), the sovereign wealth fund of the State of Qatar.
Al-Rayyan Holding, a subsidiary of QIA, has conditionally agreed to pick up a 4.26% stake in Kingdee at a subscription price of HK$10.10 per share, according to an exchange filing on Sunday.
The proceeds will be used to optimise the capital structure of Kingdee, with around 80% of the proceeds going to potential capital market transactions including acquisition and share buybacks, among others, per the filing. The rest of the proceeds will go to general operation and working capital of the firm.
Founded in 1993, Shenzhen-headquartered Kingdee has since expanded to Singapore in addition to its Hong Kong office. The firm offers different cloud-based enterprise resource planning (ERP) solutions including procurement, finance, and human resource (HR) management.
The Middle East has emerged as a favourable business and fundraising destination among Chinese startups and entrepreneurs amid rising geopolitical tension between China and the US. Animoca Brands, a Hong Kong-based gaming software firm and Web3 investment powerhouse, as well as self-driving firm Pony.ai are among some of the firms that garnered funding from NEOM, the smart and sustainable regional development in northwest Saudi Arabia.
QIA too has been eyeing investment opportunities across China’s retail, healthcare, tech and logistics sectors, said Abdulla Al-Kuwari, head of the fund’s unit Qatar Investment Authority Advisory (Asia Pacific) said during Caixin Summit in Beijing in November, per Reuters.