China-based banking branches launch loans for M&As

BEIJING, Dec 26, 2008 (Asia In Focus via COMTEX) -- BACHF | Quote | Chart | News | PowerRating -- The Shanghai branch of the INDUSTRIAL AND COMMERCIAL BANK OF CHINA (ICBC), the BANK OF SHANGHAI and the SHANGHAI UNITED ASSET AND PROPERTY EXCHANGE (UAE) jointly launched 10 billion yuan ($US1.46 billion) worth of credit lines for enterprises' mergers and acquisitions (M&A). According to an agreement signed on December 25, the UAE will recommend good enterprises and projects to the two banks, then the banks will grant M&A loans to the qualified.

* It was merely an intention of cooperation at present, and the M&A loans service was expected to formally begin in the first quarter of 2009, with a leverage rate of 50 per cent, said Huang Jixian, deputy director of the Shanghai branch of ICBC.

* As one of economic stimulus measures, China Banking Regulatory Commission (CBRC) launched the Guideline on Risk Management of M&A Loans by Commercial Banks on December 9.