Thai billionaire denies UBS role in Ping An deal

CP boss says US$9.4 billion stake purchase is funded by the group's 'own money'

PUBLISHED : Monday, 08 April, 2013, 12:00am
UPDATED : Monday, 08 April, 2013, 5:31am

Thai billionaire Dhanin Chearavanont has reportedly denied Swiss bank UBS was the mystery lender behind his conglomerate Charoen Pokphand's US$9.4 billion purchase of a stake in China's second-largest insurer, Ping An Insurance.

Dhanin was quoted on late Saturday night by, a finance portal operated by Tencent, as issuing the denial at the Boao Forum for Asia.

He said the acquisition was funded by CP's "own money", without elaborating, and reportedly added that it could not be ruled out that the group would co-operate with Ping An on rural finance business, but any such operation would be led by the insurer.

"We follow chief Ma [Ping An chairman and chief executive Peter Ma Mingzhe] on this," he was quoted as saying, while declining to disclose details.

Dhanin's denial came a day after Reuters quoted unnamed people as saying that UBS offered to extend the world's fourth-largest bridge loan ever to CP Asia in a complex financing package known only to a few involved.

The report said a five-year loan of about US$5.5 billion and another financing package explained how CP got the US$7.4 billion it needed to settle the purchase of a 15.6 per cent stake in Ping An from HSBC after an upfront payment of US$2 billion was made earlier.

The financing of the deal was the subject of intense media attention due to a lack of transparency, causing confusion for outsiders. The deal was first announced on December 5, at which time HSBC said the purchase would be financed partly in cash and partly under a facility from China Development Bank's Hong Kong branch.

Later, various media reports cited unnamed sources as saying that CDB had pulled the loan since the China Insurance Regulatory Commission had decided that the transaction fell under a rule that investment in mainland insurers could not be financed by debt.

HSBC was silent on the subject, and said on February 1 that the transaction had been fully paid by the buyer in cash, without saying how the buyer got the money.

Meanwhile, Dhanin was quoted by Bloomberg as saying yesterday that he was seeking more acquisitions on the mainland because of the abundant opportunities there. He said he was open to investing in many sectors, without naming them.

CP engages in businesses spanning from agriculture to retailing and telecommunications. Dhanin's father and uncle emigrated to Thailand from Guangdong province in 1921 and set up a small seed shop in Bangkok's Chinatown. It later expanded into animal feed production, the rearing of chicken and ducks and cultivation of shrimps.

Dhanin's business empire was once under huge financial stress during the Asian financial crisis in 1998, when the Thai baht depreciated sharply against the US dollar.