Yue Xiu Group, a trading arm of China’s Guangzhou city government, is obtaining a $1 billion short-term loan to finance its potential bid for part of Chong Hing Bank Ltd., three people familiar with the matter said.
The four banks providing the one-year loan are Bank of Taiwan, DBS Bank Ltd., Mega International Commercial Bank Co. Ltd. and Nomura Holdings Inc., the people said, asking not to be identified because the details are private. The bridge facility will initially pay interest of about 300 basis points more than the London interbank offered rate, the people said.
Liu Chong Hing Investment Ltd., Chong Hing Bank’s controlling shareholder, said this week Hong Kong’s smallest family-run lender remained in talks with Yue Xiu Group and other independent third parties on a possible stake sale. Chong Hing Bank, in which the founding Liu family controls about 60 percent, said in August it had been approached by potential buyers of interests.
Yue Xiu Group’s Guangzhou-based spokesperson didn’t answer two phone calls or reply immediately to an e-mail seeking comment on the financing today. Chong Hing Bank’s shares were trading 0.2 percent higher at HK$33.15 as of 1:04 p.m. in Hong Kong.
Chong Hing Bank Chief Executive Officer Lau Wai-man said in March the lender was open to proposals from prospective buyers for all or part of the bank. Takeover speculation has mounted since November, when Lau became the first CEO from outside the Liu family.