Charoen Pokphand Says It Has Resources for Ping An Acquisition

Charoen Pokphand Group Co. said it has the resources to complete a planned purchase of a $9.4 billion stake in China’s Ping An Insurance (Group) Co. (2318), amid concern that the acquisition will fail.

“The transaction is still under consideration by the China Insurance Regulatory Commission and we confirm that if approval is received from the CIRC, the CP Group has the necessary resources,” the Bangkok-based company said today in an e-mailed statement.

HSBC Holdings Plc (HSBA) agreed on Dec. 5 to sell its 15.6 percent holding in Ping An to four subsidiaries of CP Group in two phases. The first stage, comprising shares valued at about HK$15 billion ($1.9 billion), was scheduled for Dec. 7. The sale of the remaining shares requires approval from the CIRC by Feb. 1, or else an extension of the accord.

Concern is growing that Chinese regulators may block the deal, according to Goldman Sachs Group Inc. analysts Mancy Sun and Ning Ma. The China Insurance Regulatory Commission conducted a preliminary review of the application for the transaction, the watchdog said in a statement yesterday.

China Development Bank, which had agreed to help finance the purchase by Thai billionaire Dhanin Chearavanont’s CP Group, canceled its loans, China’s Caixin Online reported Jan. 8. The first payment to HSBC has been made, Suthana Hongthong, CP Group’s assistant vice president for corporate communication, said on Jan. 9, without giving details.

‘Transparent’ Funding

CP Group said on Dec. 25 that the acquisition of the shares was legal and the source of funding was “transparent.” Dhanin’s net worth was an estimated $6.2 billion on Dec. 7, according to the Bloomberg Billionaires Index. Almost 60 percent of the fortune is from overseas private companies.

The group, whose historical ties to China range from becoming the first foreign investor after Deng Xiaoping opened the economy in 1979 to continued management of local agricultural projects, has said it can help develop rural areas through its investment in Ping An.

To contact the reporter on this story: Supunnabul Suwannakij in Bangkok at ssuwannakij@bloomberg.net

To contact the editor responsible for this story: Chitra Somayaji at csomayaji@bloomberg.net

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