Aly Song/ReutersA worker cleans the windows of a building in front of the Ping An Insurance building in Shanghai.
SHANGHAI — The Swiss banking giant UBS made a $5.5 billion loan early this year to help a Thai company acquire a 15.6 percent stake in China’s Ping An Insurance Group, according to people briefed on the deal.
The loan helps explain how the Charoen Pokphand Group, an agribusiness giant based in Thailand, was able to complete one of the biggest deals ever in China, a $9.4 billion acquisition of shares in Ping An. The stake had long been held by the British bank HSBC, which had decided to sell to streamline its businesses.
The loan was crucial, people briefed on the transaction said, because it helped salvage a deal after several media outlets in China reported that the state-run China Development Bank withdrew financing from the Charoen Pokphand Group, also known as the CP Group, shortly before the regulatory deadline early this year.
UBS declined to comment on the loan, the details of which were disclosed earlier by Reuters.
But the people briefed on the deal said UBS had advised the CP Group on its acquisition of Ping An shares, and expected to earn about $100 million for its role in the transaction. These disclosures resolved a mystery of how the CP Group’s stake in Ping An was acquired without loans from the Chinese bank.
Executives at the privately held CP Group, controlled by the Thai billionaire Dhanin Chearavanont, could not be reached for comment. Spokesmen for HSBC and Ping An were also unavailable for comment Friday.
But a person who advised the CP Group said that the company had fully complied with regulations set by the China Insurance Regulatory Commission, which approved the deal.
The deal for Ping An stock was closely followed in Asia after one of China’s leading business publications, Caixin, reported that the CP deal was being financed in part by Chinese investors, Ping An managers and Thaksin Shinawatra, the former prime minister of Thailand.
Analysts consider Ping An one of the best-run Chinese financial firms, with major banking and insurance divisions.
The company was founded in Shenzhen in 1988, and got a lift from Chinese regulators in the late 1990s and early 2000s.
After Ping An’s initial public offering in 2004, the relatives of Wen Jiabao, the former Chinese prime minister, acquired a secret, indirect stake in the company, a stake that at one time was valued at $2.7 billion. Relatives of China’s former Central Bank chief, Dai Xianglong, also acquired an indirect stake in Ping An during the same time.
Mark Scott reported from London.
Article source: http://dealbook.nytimes.com/2013/04/05/ubs-said-to-be-lender-in-9-4-billion-ping-an-deal/?partner=rss&emc=rss
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