China Merchants Bank (CMB) shareholders have approved a more than 17 billion yuan (2.5 billion U.S. dollars) stake purchase in the Hong Kong-based Wing Lung Bank.
Earlier this month, CMB announced signing an agreement with Wing Lung Bank on equity purchase, under which it would invest 17.2 billion yuan, or 2.91 times Wing Lung Bank's audited net assets in 2007, to buy 53.12 percent of its equity.
At Friday's general shareholders meeting, 91 percent of shareholders agreed with the deal, providing the lender with greater access to the Hong Kong market, said Saturday's Shanghai Securities News.
The move made CMB, the country's sixth largest lender, only one step from securing a controlling stake in the 75-year-old family-run Hong Kong lender. It is currently waiting for approval from the country's banking regulator.
Shareholders also approved CMB to complete the deal with internal resources and to float 30 billion yuan in domestic and international subordinated bonds to enhance its adequacy ratio.
Ma Weihua, CMB's president, said Wing Lung Bank had a good management team and many high-end customers. This was in line with CMB's development strategy, adding the two companies' business could greatly complement each other as CMB had set a global goal.
Experts predicted CMB's adequacy ratio would still stand at 8 percent after the deal.
Incorporated in 1933, Wing Lung has developed into the fourth largest bank in the special administrative region of China.
(Xinhua News Agency June 28,2008)?
