Exchange Fund Investment invites banks to submit plans
Exchange Fund Investment (EFI) has invited investment banks to propose ways of disposing of the Government's $158 billion share portfolio, sources said.
The move marks a further step towards a sale of the Government's holdings amassed during last year's controversial stock market intervention.
EFI had sent letters to a number of international houses and large local brokerages, sources said. The company's board will choose three investment banks by the end of this month to form a panel to advise on a sale of the Government's holdings.
The proposals would form part of the selection criteria in deciding which institutions will join the panel.
EFI was set up to manage the portfolio bought during August's intervention plus shares formerly held by the Land Fund.
The portfolio, including the Land Fund shares, was valued at $158 billion on December 11.
The company's board last month said it would set up a panel of financial advisers to help EFI design and implement a detailed framework for disposal of the shares.
It said possible options for disposal included share placements, public auctions, turning the portfolio into a unit trust fund and issuing convertible bonds.
Sources said many investment banks had tried to contact EFI board members in the past month to express a strong interest in joining the panel. EFI board members had not contacted them individually, instead favouring a tender process for the panel's selection.
The company has invited investment banks to submit tender proposals, including detailed suggestions for disposal of the shares, their fees and charges, and how they would help EFI execute the sale.
'The selection criteria will depend on their proposals, their technical expertise, placement capabilities and their commitment to Hong Kong,' a source said. 'The investment banks would also need to submit their fees and charges for services to EFI, since costs would be one of the considerations in the selection process.' EFI was granted an investment adviser's licence by the Securities and Futures Commission last week, giving it the legal right to buy and sell the government portfolio at any time.
