TPG Capital invests $80.5m in Chinese footwear chain Daphne

The unsecured convertible bonds, due in 2014, will be convertible into new ordinary Daphne shares at HK$3.50 ($0.45) each. TPG will also receive 100 million warrants with an initial price of HK$4 ($0.52) each, with the right to subscribe for one ordinary share per warrant.

Once the bonds are fully converted and the warrants fully exercised, TPG will hold around 14.5 per cent of the total enlarged share capital of Daphne. The company intends to use the investment to expand its Shoebox and Daphne shoe shop chains.

Daphne chairman Chen Ying-Chieh said, “We view this as a long-term partnership and intend to work closely with TPG to further strengthen our financial management, operational efficiency and corporate governance. We will also fully leverage TPG's global network to explore new opportunities and enhance Daphne's overall competitive position in the marketplace.”

Stephen Peel, managing partner of TPG’s operations in Greater China, Eurasia, India and Southeast Asia, said, “This investment is consistent with TPG's philosophy of supporting high-growth Chinese consumer-oriented companies to achieve world-class operating standards. We believe our capital and operational expertise will contribute to a successful partnership with Daphne.”

Daphne launched its footwear business in 1990 and now operates over 3,000 outlets in China and Taiwan, including, in addition to its own brands, Adidas and Nike stores.

TPG Capital is the buy-out arm of private investment firm TPG. With assets under management worth approximately $45bn, the firm has 16 offices across the US, Europe, Asia and Australia.

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