Portfolio company
China GrenTech |  |
|---|
Company website | www.powercn.com |
Business sector | Business services |
Country of operation | China |
Market | China |
Investment status | Realised portfolio |
Investment type | Growth capital |
Date of original investment | 2003 |
Date of exit | 2007 |
Exit method | IPO |
Office | Beijing, China |
Background
China Grentech, formerly known as Powercom, is an integrated cellular telecommunication coverage system and service provider. Founded in 1999 the company manufactures, installs and maintains repeaters, antennas and related radio frequency accessories to optimize the operational efficiency of CDMA and GSM mobile networks for network operators.China Grentech owns the intellectual property rights for the industry-leading Radio Frequency (RF) technology platform, the core platform for delivery of China's wireless communications. Clients, including China's two mobile carriers, China Unicom and China Mobile, use Powercom's core platforms and services to deliver their services to over 270 million subscribers in China alone.
The possibility of new mobile operator licenses being issued by the Chinese Government and the roll-out of third generation mobile services (3G) are expected to fuel further substantial growth in the mobile service market.
Their needs
By 2003 China Grentech had already seen rapid growth in its business over several years, and the high-growth market conditions presented the company with a huge opportunity to increase its share of the domestic market.Not content with the domestic opportunities that the largest mobile services market in the world could offer, China Grentech also had a vision to grow its business through international expansion.
To deliver on the growth plan the management team at China Grentech saw a clear need to re-structure its business and to raise finance to fund its development. The re-structuring plans included an off-shore listing to provide access to capital and to raise its profile.
China Grentech were looking for a partner who could advise on re-structuring the business and who could help with their expansion plans. In addition there was a requirement for a backer who could advise on operational aspects of the business, including corporate governance and financial reporting.
Our solution
Actis led a syndicate of investors to invest a total of US$26 million in China Grentech to purchase a significant minority stake in the company. Actis invested US$12 million with Standard Chartered Private Equity and JAFCO Asia investing a further US$14 million between them.As the lead investor Actis worked closely with China Grentech throughout the investment process and streamlined the due diligence and legal documentation.
The financial package will fund the re-structuring of China Grentech as an off-shore company and its expansion plans.
Actis's added value
Actis worked alongside the company's legal advisers and accountants to develop a re-structuring plan to transform China Grentech from an onshore company into an off-shore vehicle.Actis has also introduced potential partners for China Grentech's international expansion. One of the key relationships brokered by Actis is with Celtel (www.celtel.com), another Actis portfolio company and one of Africa's leading mobile operators with operations in 13 countries across sub-Saharan Africa.
China Grentech made its debut on NASDAQ in March 2006.