Aisa's first US-style LBO

Author: | Published: 1 Jan 2000

One of 1999's more notable deals was the acquisition of ASAT Holdings by a group of private equity funds led by Chase Asia Equity Partners, which used US-style leveraged financing techniques rarely seen in Asia. Anthony Root of Milbank, Tweed, Hadley & McCloy, Hong Kong explains

Financial investments in Asia by private equity funds throughout the nineties tended to be relatively small minority stakes (ranging from $10 million to $75 million) compared to US leverage buyout transactions, which have included multi-billion dollar corporate take-overs. Furthermore, investment opportunities available to financial investors in Asia during the nineties were often limited, with Asian companies preferring to enter into arrangements with strategic investors.

This pattern changed during the economic crisis in the late nineties, when major Asian companies began requiring substantial funds to rebuild their capital and engaged in extensive restructurings. In anticipation of this change, private equity funds and LBO firms from the US raised new...