To enhance the financial position of Bao Viet and extends HSBC's position in key Asian market
HSBC Insurance (Asia Pacific) Holdings (HSBC) has signed an agreement to increase its shareholding in Bao Viet Holdings, a Vietnam-based insurance and financial services group, to 18% for VND1.88 trillion ($105.3 million).
HSBC had acquired a 10% interest in Bao Viet in September 2007. As per the terms of the original agreement, HSBC had an option to purchase a further 8% of Bao Viet shares from the Ministry of Finance (MoF). The MoF has now given formal consent for this option to be exercised through the issue of new Bao Viet shares to HSBC.
Mr Le Quang Binh, chairman of Bao Viet Holdings, said: After two years of successful co-operation, we are pleased HSBC is able to increase its shareholding to 18%. The Ministry of Finance has supported the private placement as an alternative approach to acquiring shares from the Ministry. The increased shareholding by HSBC adds to the financial position of Bao Viet and its capacity to finance its growth and development.
A total of 53,682,474 new shares will be issued to HSBC through a private placement to increase HSBC’s stake in Bao Viet to 18%. The completion of the private placement is subject to shareholder approvals and other conditions as well as approval from the State Securities Commission.
As part of the original agreement, HSBC continues to hold certain pre-emptive rights to acquire shares currently owned by the MoF with a maximum HSBC shareholding of 25 % within the first five years of the agreement and prevailing foreign ownership limits thereafter.