HSBC to increase stake in Vietnam's largest insurance and financial services group
22 October 2009
HSBC Insurance (Asia Pacific) Holdings Limited has announced that it will raise its shareholding in Vietnam's leading insurance and financial services group, Bao Viet Holdings, to 18 per cent from 10 per cent that it currently has for VND1.88 trillion (approximately $105.3 million).
HSBC acquired the 10-per cent stake in Bao Viet in September 2007.
Under the terms of the original agreement, HSBC had an option to purchase a further 8 per cent of Bao Viet shares from the Vietnam's ministry of finance (MoF). The MoF has accorded formal consent for this option to be exercised through the issue of new Bao Viet shares to HSBC.
"Our additional investment in Bao Viet reflects the successful partnership we have enjoyed over the last two years and the confidence we have in the long-term growth prospects of Bao Viet and of Vietnam," said Michael Geoghegan, HSBC's group chief executive. "This is also entirely consistent with our stated strategic focus on the world's faster growing markets and our intention to meet the insurance and wealth protection needs of our customers in these rapidly developing markets."
Le Quang Binh, Ccairman of Bao Viet Holdings, said, "After two years of successful co-operation, we are pleased HSBC is able to increase its shareholding to 18 per cent. 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. It also reflects HSBC's commitment as the most important strategic shareholder in Bao Viet."
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 per cent. Completion of the private placement is subject to shareholder approvals and other conditions as well as approval from the State Securities Commission.