HSBC's $9.3.8-bn sale of Ping An stake under a cloud: report

HSBC's plans of selling its stake in Ping An Insurance to Thailand's Charoen Pokphand Group (CP Group), for $9.3.8 billion has come under a cloud after state-run China Development Bank (CDB) raised concerns over CP Group funding the deal, Reuters today reported, citing unidentified sources.

In early December 2012, HSBC, Europe's largest lender, agreed to sell its entire 15.57-per cent stake in China's Ping An Insurance to an affiliate of Charoen Pokphand Group (CP Group), a group linked to Thailand's richest man, Dhanin Chearavanont, for $9.38 billion in cash. (See: HSBC to sell entire stake in China's Ping An Insurance to Thai group for $9.38 billion)

The stake is planned to be sold to All Gain Trading Ltd, Bloom Fortune Group Ltd, Business Fortune Holdings Ltd and Easy Boom Developments Ltd, all of whom are indirect wholly-owned subsidiaries of CP Group.

The deal was to be completed in stages, with about a fifth of the stake to be transferred to the buyers on 7 December, with the remainder still subject to approval by the China Insurance Regulatory Commission.

HSBC, Europe's largest lender planned to use the proceeds from the sale towards capital in support of the further implementation of its overall strategy.

HSBC had said that the transaction is expected to strengthen its Core Tier 1 Capital Ratio by approximately 0.5 per cent and the Total Capital Ratio by approximately 1.0 per cent based on 30 September 2012 ratios.