RLPC-Yue Xiu seeks bridge loan for Chong Hing Bank buy
LONDON Aug 7 (Reuters) - Chinese state owned conglomerate Yue Xiu Enterprises (Holdings) Ltd is seeking a one-year bridge loan to back its acquisition of a stake in Hong Kong-listed Chong Hing Bank Ltd banking sources said on Wednesday.
Nomura is arranging the loan, one banker said. The Japanese bank is likely to underwrite the loan with a Taiwanese bank and another Asian lender, a second banker said.
Yue Xiu Enterprises (Holdings) Ltd is the Hong-Kong based investment corporation of the Guangzhou government.
The Hong Kong Economic Journal (HKEJ) reported on Wednesday that Yue Xiu Enterprises could buy as much as 59.86 percent of ishares from Liu Lit Mo, chairman of Chong Hing Bank, Liu Lit Chi, deputy chairman and managing director of Chong Hing Bank, and Bank of Tokyo-Mitsubishi UFJ.
The share purchase has been valued at around HK$6.59 billion ($849.60 million)to HK$8.78 billion.
HKEJ also reported that a $1 billion loan is already in place to back the acquisition.
The size of the stake being purchased has yet to be confirmed, along with the size of the bridge loan, the sources said.
The bridge loan is expected to have an interest margin of around 300 basis points in the first three months, which will increase along with the tenor of the loan, a third banker said.
Shares of Chong Hing Bank were suspended on Wednesday after closing at HK$22.45 per share on Tuesday. The bank posted a profit of HK$276 million in the first half of 2013, a 6 percent increase on the same period last year.
Yue Xiu Enterprises (Holdings) Ltd signed a separate $280 million, three-year term loan with 14 banks in July. That loan has not been drawn yet, the sources said. ($1 = 7.7566 Hong Kong dollars) (Editing by Tessa Walsh)
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