Fund becomes the first foreign investor with majority stake of a mainland bank
Newbridge Capital has secured six seats on Shenzhen Development Bank's (SDB) 15-member board in a transaction that will make it the first foreign investor holding the largest shareholding in a mainland bank.
Agreements signed between the two parties give the United States private equity fund the option to further increase its holdings and overhaul the bank's corporate structure, according to a Newbridge statement issued through the Shenzhen Stock Exchange at the weekend.
Newbridge is committed to retaining its initial holding of 348.1 million shares for five years after the deal is completed, unless otherwise approved by the China Banking Regulatory Commission.
The private equity fund earlier this year agreed to spend 1.23 billion yuan for the stock, representing a 17.89 per cent stake, in a revival of a deal that almost failed amid recriminations and lawsuits.
The commission has given its blessing to the deal, which is now awaiting final approval from the central state assets authority.
Newbridge's bid first surfaced in 2002, nearly two years before HSBC confirmed its intent to buy 19.9 per cent of Bank of Communications for 14.46 billion yuan - the largest single foreign equity investment in a mainland bank.