Li and Fung gets cash infusion for logistics firm

Li and Fung-owned company LF Logistics has received a cash injection of 300 million US dollars from Singapore-based investment company Temasek, after they agreed to acquire a 21.7 percent stake in the company.

The investment values LF Logistics at approximately 1.4 billon US dollars on a post-money equity valuation basis.

In a statement, Li and Fung, which remains a controlling shareholder with a 78.3 percent stake, said that the money would be used to fund future capital expenditures at LF Logistics, repay existing bank facilities and accelerate business growth initiatives.

As a result of this investment, the proposed spin-off IPO of the company will be postponed until further notice.

Joseph Phi, group president at Li and Fung, said: “We expect the strong growth of LF Logistics to continue. With operations in all of Asia’s fastest growing cities, we are well positioned to capitalise on rising middle-class consumption and our early investment in e-logistics allows us to enjoy first-mover advantage.

“Our logistics strength combined with Li and Fung’s sourcing and new digital supply chain solutions, represents a unique end-to-end offering that encompasses the entire value chain.”

Spencer Fung, group chief executive at Li and Fung, added: The investment from Temasek will allow us to unlock the value of LF Logistics and accelerate its business growth. It will also enhance Li and Fung’s capital structure and financial flexibility.

“Our strong operating cash flow and solid balance sheet provides us with ample liquidity to fund future growth and complete our transformation efforts, as we execute our Three-Year Plan goal of creating the Supply Chain of the Future.”