Xin­jiangHual­ing in move to es­tab­lishGe­or­gia’sNo 3 bank

China Daily (Canada) - - BUSINESS - By JIANG XUEQING jiangx­ue­qing@chi­nadaily.

Xin­jiang Hual­ing Trade and In­dus­try (Group) Co Ltd said on Wed­nes­day that it had en­tered into a pre­lim­i­nary agree­ment with So­ci­eteGen­erale Group and the Euro­pean Bank for Re­con­struc­tion and Devel­op­ment to buy So­ci­ete Gen­erale’s ma­jor­ity stake in Bank Repub­lic, its Georgian sub­sidiary.

The trans­ac­tion will help Hual­ing, a large pri­vate con­glom­er­ate based in China’s Xin­jiang Uygur au­ton­o­mous re­gion and one of the ma­jor for­eign in­vestors in Ge­or­gia, to strengthen its bank­ing arm in Ge­or­gia.

Ac­cord­ing to the trans­ac­tion terms, Hual­ing will merge Bank Repub­lic with its bank­ing en­tity Ba­sisBank to cre­ate a uni­ver­sal bank that will be­come the No 3 player in the Georgian mar­ket with to­tal as­sets reach­ing about 2.5 bil­lion Georgian lari ($1.07 bil­lion). The new bank will have 250,000 clients, 61 branches and some 1,300 staff.

Af­ter the merger, So­ci­ete Gen­erale will own ap­prox­i­mately 8 per­cent of the shares in the new com­bined en­tity and re­main a mem­ber of the su­per­vi­sory board.

The Euro­pean Bank for Re­con­struc­tion and Devel­op­ment will also hold a mi­nor­ity stake of ap­prox­i­mately 3.9 per­cent in the new en­tity and re­main a mem­ber of the su­per­vi­sory board as well as a com­mit­ted fi­nanc­ing part­ner for the Georgian bank­ing mar­ket.

The trans­ac­tion is sub­ject to Georgian reg­u­la­tory ap­provals and reg­is­tra­tion with rel­e­vant Chi­nese au­thor­i­ties, ac­cord­ing to So­ci­ete Gen­erale.

Hual­ing first en­tered the Georgian mar­ket in 2007 and in­vested in lo­cal forestry ex­plo­ration, wood pro­cess­ing and min­ing. Two years later, it in­vested in the free in­dus­try zone in Ku­taisi, the leg­isla­tive cap­i­tal of Ge­or­gia, with on­go­ing con­struc­tion of in­fra­struc­ture fa­cil­i­ties and in­stal­la­tion of equip­ment, amid great ef­forts to take an ac­tive part in global com­pe­ti­tion.

The group made a medi­u­mand long-term devel­op­ment plan to seek sus­tain­able devel­op­ment and new en­gines for profit growth by go­ing global.

Its pre­vi­ous ex­pe­ri­ence in help­ing with the ex­change of build­ing ma­te­ri­als and per­son­nel be­tween coun­tries along the Silk Road, a his­tor­i­cally im­por­tant trade route con­nect­ing theWest and the East from China to theMediter­ranean Sea, es­tab­lished a solid foun­da­tion for the group’s de­ploy­ment along the route, ac­cord­ing to in­for­ma­tion posted on its web­site.

In June 2012, Hual­ing ac­quired a 90 per­cent eq­uity stake in Ba­sisBank. Fol­low­ing the ac­qui­si­tion, it in­jected an ad­di­tional $30 mil­lion into the bank. As of March 31, the to­tal as­sets of Ba­sisBank in­creased 6.5 per­cent from the same pe­riod last year to 724 mil­lion lari, ac­cord­ing to its quar­terly fi­nan­cial high­lights.

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