HSBC’s Hang Seng Buyout Plan Gains Shareholder Approval
London-headquartered HSBC has successfully obtained approval from the shareholders of subsidiary Hang Seng to take the Hong Kong lender private.
HSBC’s proposal to buy out Hong Kong-based subsidiary Hang Seng Bank for $14 billion has been approved by the latter’s shareholders, according to a statement. During a meeting on January 8, the British lender obtained approximately 86 percent of the disinterested votes in favor of privatization, which is above the 75 percent required.
The proposal will now be subject to a High Court hearing to sanction the scheme on January 23. If successful, the scheme is expected to become effective on January 26 and Hang Seng’s shares will be delisted from the Hong Kong Stock Exchange on January 27.
«We are pleased with the approval of the proposal and grateful to Hang Seng Bank shareholders for their continued support,» commented HSBC CEO Georges Elhedery. «The approval reflects strong confidence in Hang Seng Bank’s franchise and in the opportunities that full ownership within the HSBC Group can unlock. We look forward to progressing this proposal and fulfilling the remaining conditions, and will provide further updates in due course.»
While there are concerns about HSBC shouldering loan risks linked to the downturn of Hong Kong’s commercial real estate sector, Elhedery had previously insisted that the move to privatize the local lender was strategically aligned to drive stronger growth.
