Tiger Global Management and its affiliate funds disclosed a significant stake in Ehi Car Services Limited, a car rental holding company based in China. Charles “Chase” Coleman III is the co- founder and portfolio manager of the investment management firm.
Tiger Global investment details
Based on its 13D filing with the Securities and Exchange Commission (SEC) Tiger Global and its affiliates beneficially own 9,403,060 shares or 21.5% stake in Ehi Car Services.
The filing indicated that Tiger Global Mauritius entered into a Securities Purchase Agreement with Ehi Car Services on May 22, 2015. Under the agreement, Global Mauritius bought 1,111,111 Class A stock of the Chinese car rental holding company for $6.00 per share or total off$6,666,999. The fund also purchased 333,333 American Depositary Shares (ADS) of the company for $12 per share or total of $3,999,996.
Global Mauritius also entered into contractual agreements with one or more counterparties concerning cash-settled total return swaps between April 2 and April 24, 2015. The swaps constitute economic exposure of additional 632,900 Class A shares Ehi Car Services as of May 22. The swaps represent around 1.5% of the outstanding Class A shares of the Chinese car rental holding company with an expiration date of May 15, 2018.
Global Mauritius also signed a Lock-up agreement in connection with the Purchase Agreement on May 22. The fund agreed not to offer or sell any Class A shares or ADS it purchased until November 21, 2015, subject to certain customary exceptions.
Tiger Global acts as the management company of the Tiger Global Mauritius, Tiger Global Investments and Tiger Global Performance, which are collectively referred to as “Tiger Entities.”
According to the regulatory filing, The Tiger entities intend to review their investment in Ehi Car Services on a continuing basis depending on different factors including its financial position, strategic directions, and action taken by its board and management.
Tiger Global and its affiliates will also monitor other investment opportunities available to them, the price levels of the Class A shares of Ehi Cars Services, conditions of the securities market, the general economy and industry.
Based on the above factors, the Tiger Entities may sell or purchase additional stake in the Chinese car rental holding company as they deem appropriate. The will also review or reconsider their position, change their purpose, and formulate plans or proposals related to their investment in Ehi Car Services.
eHi Car Services stock performance
Ehi Car Services has a fleet of 18,000 vehicles in 90 cities across China. The company raised $120 million from offering 10 million ADS for $12 per share during its initial public offering in November last year.
Since its IPO, the price of the Ehi Car Services’ ADS increased to as much as $16.12 per share. The company gained 87% of stock value year-to-date.