Bnp Takes Peregrines Greater China Business

French bank Banque Nationale de Paris said yesterday it had agreed to buy the flagship Greater China broking and corporate finance operations of bankrupt Peregrine Investments Holdings Ltd.

The acquisition will involve the transfer of certain related assets and liabilities as well as a corresponding team of about 150 employees led by Francis Leung operating in Hong Kong, Beijing, Shanghai and other overseas sales offices of the Peregrine group, BNP said in a statement.

Financial details were not disclosed but provisional liquidator David Hague said gross assets worth about HK$290 million (US$37.5 million) would be transferred to a new venture.

 

The deal is subject to approval by the High Court of Hong Kong and regulatory authorities.

This new acquisition allows BNP Hong Kong, which ranks among the top European banks in the SAR (Special Administrative Region -- Hong Kong) to offer a fuller range of services to its important customers in Hong Kong and mainland China, BNP Hong Kong chief executive Didier Balme said.

The acquisition also allows BNP to look beyond the current economic turmoil in Asia and stake out a stronger competitive position in two of the worlds most important markets Greater China and Southeast Asia.

Peregrine was one of Asias largest independent investment banks before a meltdown in Indonesian markets dealt the company a fatal blow and it was forced into liquidation last month.

Its Greater China business will be integrated into Banque Nationale de Pariss BNP PrimeEast Hong Kong broking operations and the new entity will be named BNP Prime Peregrine Ltd.

There will be a Greater China holdings formed to direct the business in Hong Kong and mainland China, said Hsieh Fu Hua, group managing director of BNP PrimeEast. BNP PrimeEast and the rest of the region will be directed out of Singapore.

Senior management at Peregrines Greater China business will hold a stake of about 10 per cent in BNP Prime Peregrine and Banque Nationale de Paris and BNP PrimeEast will have the remaining 90 per cent.

BNP bought 70 per cent of regional brokerage PrimeEast Capital Group in November 1996.

The French bank has about 900 staff in Hong Kong and China, including 100 at PrimeEast.

BNP is one of the largest banks in the world and will provide our Greater China business with the kind of financial strength and security required to compete more effectively, said Peregrines Leung, now executive vice chairman and managing director of BNP Prime Peregrine.

He said the 150 staff transferring to BNP Prime Peregrine represented almost all the staff still at Peregrines Greater China equities division.

Peregrine's Greater China team was the acknowledged market leader in raising capital for China-related enterprises. With BNP behind us, we intend to retain our position and extend our lead, Leung added.

Hague, a partner at Price Waterhouse, said he was confident more deals to sell remaining parts of Peregrine would be concluded within coming weeks.

We are in the process of negotiating with interested parties to acquire the remaining Peregrine businesses in Hong Kong and other parts of the world.

BNP has made a bid for Peregrine's entire London arm, Peregrine Securities (UK) Ltd, which employs 105 people.

Most of Peregrines remaining regional equity operations outside Greater China are due to be snapped up by Spains Banco Santander, local newspapers say.

A first sale of assets belonging to Peregrine was announced last week with the sale of its 70.6 per cent stake in investment holding and property development company Kwong Sang Hong International Ltd to a subsidiary of Chinese Estates Holdings Ltd for HK$736.5 million.