Thursday, April 20, 2006
China Won't Waive Stake Limit for Guangdong Bidders, Paper Says
2006-04-19 21:55 (New York)
By Luo Jun
April 20 (Bloomberg) -- China's banking regulator probably
won't waive ownership restrictions on overseas investors who are
bidding for control of Guangdong Development Bank, the Shanghai
Securities News reported, citing a person it didn't identify.
The China Banking Regulatory Commission hasn't yet made a
decision on waiving the restriction on the Guangdong Development
sale, the newspaper said. China's banking rules limit overseas
investors to a combined stake of 25 percent in any domestic bank,
with no single investor allowed more than 20 percent.
Citigroup, the world's biggest bank by market value, is
leading a bidding group including U.S. buyout firm Carlyle Group
that's seeking to acquire 85 percent of Guangdong Development for
about $3 billion. Citigroup and Carlyle are seeking a combined 49
percent stake, people familiar with the matter told Bloomberg News
Rival bidder Societe Generale SA, together with Agence
Francaise de Development, wants to hold a total 25 percent of the
China is sensitive to the issue of ownership of its lenders.
``In reforming the state-owned banks, we need to follow the
principle that the state must take the dominant controlling
ownership in order to keep the economic viability and minimize
financial risks,'' Chinese Premier Wen Jiabao said in March.
(Shanghai Securities News, 4/20, A5)