CP 'has funds' for Ping An deal

HONG KONG — Charoen Pokphand Group said on Friday that it had the resources to complete a planned purchase of a $9.4-billion stake in China's Ping An Insurance, amid concern that the acquisition will fail.

"The transaction is still under consideration by the China Insurance Regulatory Commission and we confirm that if approval is received from the CIRC (China Insurance Regulatory Commission), the CP Group has the necessary resources," the Bangkok-based company said in an e-mailed statement on Friday.

HSBC Holdings Plc agreed on Dec 5 to sell its 15.6% holding in Ping An to four subsidiaries of CP Group in two phases. The first stage, comprising shares valued at about HK$15 billion (US$1.9 billion), was scheduled for Dec 7.

The sale of the remaining shares requires approval from the CIRC by Feb 1, or else an extension of the accord.

Concern is growing that Chinese regulators may block the deal, according to Goldman Sachs analysts Mancy Sun and Ning Ma. The CIRC conducted a preliminary review of the application for the transaction, the watchdog said in a statement on Thursday.

China Development Bank, which had agreed to help finance the purchase by Thai billionaire Dhanin Chearavanont's CP Group, cancelled its loans, China’s Caixin Online reported on Tuesday.

"The first payment to HSBC has been made," Suthana Hongthong, CP's assistant vice-president for corporate communication, said on Wednesday, without giving details.

CP said on Dec 25 that the acquisition of the shares was legal and the source of funding was "transparent".

Mr Dhanin’s net worth was an estimated $6.2 billion on Dec 7, according to the Bloomberg Billionaires Index. Almost 60% of the fortune is from overseas private companies.

CP, the first officially approved foreign investor in China after Deng Xiaoping opened the economy in 1979, has widespread interests there in agribusiness, retailing and other sectors.

The Thai company has said it can help develop rural areas through its investment in Ping An.

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Writer: Bloomberg News