Tenth investment from Asia Mezzanine Fund II
Hong Kong and Washington, DC, January 18, 2010 - Darby Overseas Investments, Ltd. ("Darby"), the private equity arm of Franklin Templeton Investments, announced that its Darby Asia Mezzanine Fund II ("DAMF II") provided a US$33.5 million senior secured convertible loan to PECH Holdings LLC, the holding vehicle of Prestolite Electric Beijing Ltd. ("PEBL"), which is the China-based operating joint venture controlled by Prestolite Electric Incorporated ("Prestolite"). Proceeds from the transaction were used by Prestolite for corporate purposes. Further details on the transaction were not disclosed.
Founded in 2001 and based in the Tongzhou District, an eastern suburb of Beijing, PEBL is the leading full-line provider in China of medium- and heavy-duty alternators and starter motors to both original equipment manufacturers and the aftermarket. PEBL offers the broadest line of heavy-duty alternators in China, and is the largest supplier of alternators to both the Chinese bus and truck markets. In addition to starter motors and alternators, PEBL also supplies related component parts, including regulators, armatures, rotors, and shafts.
Prestolite, which is based in Plymouth, Michigan, is a major global manufacturer of alternators and starter motors sold in the medium- and heavy-duty vehicle, military, and industrial markets. With operations in North America, South America, Europe, and Asia, Prestolite provides value-added, highly engineered products under the Prestolite Electric, Leece-Neville, and Indiel brand names. Prestolite is primarily owned by a fund managed by First Atlantic Capital, Ltd. ("First Atlantic"), a New York based private equity firm.
David Hudson, Darby's senior managing director for Asia and Global Infrastructure, commented: "PEBL is well positioned to take advantage of strong prospects in the China medium- and heavy-duty vehicle industry. We are attracted to PEBL because of its strong leadership, broad offering and innovative new products."
Joseph Lefave, Prestolite's president and CEO, commented: "Mezzanine finance is an attractive source of long-term capital to support Prestolite's growth. We are very pleased to take advantage of Darby's broad experience in mezzanine financing."
Final equity commitments to the US$254 million DAMF II were completed in October 2007. Investors include China Investment and Finance, a subsidiary of China CITIC Bank; Mizuho Corporate Bank; Franklin Templeton Investments, the Asian Development Bank, KfW, FMO and two funds managed by AXA Private Equity.
Darby has been managing mezzanine funds in Asia since 2002. The firm has been a pioneer in providing mezzanine products – a hybrid of both debt and equity – to various emerging market regions, including Latin America, Asia, and more recently Central and Eastern Europe. In July 2006 Darby and Hana Financial Group, one of Korea's leading financial institutions, announced the closing of their jointly managed Darby-Hana Korea Emerging Infrastructure Fund, which raised KRW580 billion, and is currently 55% invested.
Darby Overseas Investments, Ltd. was founded in 1994 by The Honorable Nicholas F. Brady, who served as U.S. Secretary of the Treasury between 1988 and 1993. Richard Frank joined the firm as CEO in 1997 after his career at the International Finance Corporation (IFC)/World Bank. In 2003, Darby became a fully owned subsidiary of Franklin Resources, Inc. [NYSE:BEN], a global investment management organization operating as Franklin Templeton Investments. For more information please visit darbyoverseas.com.
Franklin Templeton Investments provides global and domestic investment management solutions managed by its Franklin, Templeton, Mutual Series, Fiduciary Trust, Darby and Bissett investment teams. The San Mateo, CA-based company has more than 60 years of investment experience and over US$553 billion in assets under management as of 31 December 2009. For more information, please visit franklintempleton.com.