New Russia-China fund eyes forestry deal

A multibillion-dollar investment fund set up by Russia and China is expected to make its first investment, into a Russian forestry company, as economic ties between the neighbouring countries grow closer reports Reuters.

Plans for the fund - a venture between sovereign wealth fund China Investment Corp and the state-backed Russian Direct Investment Fund - were announced in October. The fund was unveiled during a visit by Vladimir Putin, who is making his first trip to Beijing since his return to the Russian presidency.

The first investment is expected in the next month and is likely to be into one of Russia's largest forestry firms, which exports a substantial amount of wood to China, Kirill Dmitriev, CEO of the Russian Direct Investment said.

It will aim to allow the forestry company to make higher-margin processed wood products in Russia, which it can export. Dmitriev declined to name the company. A source close to the deal said that an initial investment could be around $200 million for a minority stake.
The RDIF was created to give major foreign investors greater comfort in Russia's uncertain business environment and is investing with private equity, strategic investors and sovereign wealth funds. It is separately investing alongside China. Source: Reuters

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