CHINA Strategic Investment's attempt to take controlling stakes in Pacpo Holdings and Hongkong Building and Loan Agency (HKBLA) has collapsed following objections lodged by a group of creditors.
The hitch to the $170 million deal emerged late last week when five of the eight lenders behind a revolving $435 million facility granted to HKBLA in June last year objected to the change of beneficial ownership of the company.
News of their objection was passed on to HKBLA on Wednesday by Schroders Asia, the agent for all eight, and there was no change in their stance by Friday afternoon - the deadline for acceptance.
A meeting of all the parties involved in the deal was called but Schroders confirmed it was highly unlikely that the lenders would reconsider their decision, even if more time was allowed.
As a result, China Strategic decided to pull out of the sale and purchase agreement and abandon its plans for a general offer to shareholders in both companies.
Minority shareholders in Pacpo would have been offered $3.82 a share while HKBLA minorities would have been offered $20.43.