StanChart seeks acquisitions after raising US$743m from issue

PUBLISHED : Saturday, 09 December, 2006, 12:00am
UPDATED : Saturday, 09 December, 2006, 12:00am

Standard Chartered, which has been expanding in Asia over the past year, has raised US$743 million through preference shares represented by American depositary shares, with the funds to be used for general purposes including acquisitions.

The London-based lender has issued 7,500 ADSs, with each ADS representing one preference share, each share with a paid-up amount of US$100,000.

The preference shares will pay a semi-annual dividend at 6.409 per cent of the paid-up amount until early 2017.

Thereafter, the share will pay dividend at a rate of 1.51 percentage points above the three-month London interbank offered rate per year, the lender said.

Last month the bank completed its US$1.2 billion acquisition of Hsinchu International Bank, the seventh-largest private sector bank in Taiwan by loans and deposits. That followed its purchase last year of Korea First Bank and a 19.9 per cent stake in Tianjin-based Bohai Bank.

Peter Sands, Standard Chartered's new group chief executive, last month said that additional acquisitions were possible, in the mainland among other places, provided that the potential targets complemented the lender's organic initiatives.

Standard Chartered has applied to incorporate in the mainland, a requirement for foreign banks to offer full yuan-denominated services.

The bank's first-half net profit rose 13.6 per cent to US$1.1 billion from US$971 million a year earlier. Its capital adequacy ratio strengthened to 14.2 per cent from 12.9 per cent.

The lender is seeking approval from Britain's Financial Services Authority to admit its ADS to the Official List maintained by the British Listing Authority and to trade them on the London Stock Exchange's Gilt-Edged and Fixed Interest Market.

JP Morgan, Merrill Lynch and Standard Chartered Bank are the joint bookrunners of the ADS deal while Goldman Sachs, Morgan Stanley and UBS Investment Bank are the co-managers.