Private equity firm Bain Capital has agreed to invest about US$300 million in Gome Electrical Appliances, Bloomberg reported, citing sources familiar with the deal. The investment would represent a 16% stake in China’s second-largest electronics retailer and would be Bain’s single largest investment into the Chinese market. The firm reportedly plans to acquire nearly US$200 million of seven-year convertible bonds issued by Gome and underwrite a share offer worth about another US$230 million. After the deal, Bain would become Gome’s second-largest shareholder; the share sale would be equivalent to about 18% of Gome’s existing capital. The capital influx from Bain’s investment is expected to help Gome pay down its $670 million of convertible bonds due to mature in 2014.
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