Charoen Pokphand Group Co., the largest stockholder in Ping An Insurance Group Co. (2318), pledged about 880.2 million Hong Kong-listed shares in China’s second-largest insurer to UBS AG (UBSN) to back financing.
CP Group’s ownership in Ping An through units dropped to 14 percent of total share capital as of Nov. 12 from 17 percent on Nov. 7, Shenzhen-based Ping An said in a filing to the Hong Kong Stock Exchange yesterday.
The adjustment and financing arrangements are “simply a tactic of CP Group in view of its overall financial plan and the future business opportunities,” CP said in a notice to Ping An that was included in the insurer’s filing.
CP Group, based in Bangkok and controlled by Thai billionaire Dhanin Chearavanont, completed purchase of a $9.4 billion stake in Ping An from HSBC Holdings Plc (HSBA) this year amid speculation that the company may not have the resources to finance the deal.
The company is seeking more acquisitions to tap growth in China, Dhanin said in April. When asked about a Financial Times report that UBS had provided a $5.5 billion loan to fund the Thai company’s purchase of the Ping An stake, Dhanin said the funds came from the group itself, declining to elaborate.
CP Group has no intention to reduce its stake in Ping An and is committed to the long-term investment in the insurer as its largest shareholder, it said in the notice published by Ping An.
Shares of Ping An have declined 4.1 percent in Hong Kong this year, compared with a 1.1 percent gain in the city’s benchmark Hang Seng Index. The stock fell less than 1 percent to close at HK$62.25 yesterday, before the announcement.
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