- Thursday 2010-03-11 10:19
The Guangdong branch of China Mobile (0941.HK) has signed an agreement with Shanghai Pudong Development Bank (SPD Bank) (600000) to subscribe to 2.2 billion new shares to be issued by SPD Bank at 18.03 yuan per share for a total of 39.8 billion yuan, reports NetEase, citing an announcement by China Mobile.
Upon the completion of the transaction, China Mobile will hold a 20 percent stake in SPD Bank, becoming the second largest shareholder of the latter.
The agreement gives China Mobile the right to appoint at least two non-independent directors and one independent director to the board of SPD Bank. Financial results of SPD Bank will be consolidated into China Mobile’s financial statements. However, it will not be involved in SPD Bank’s daily operations.
The transaction is pending the approval of SPD Bank's shareholders, the China Banking Regulatory Commission and other relevant authorities.
As of the end of third quarter 2009, the capital adequacy ratio and core capital adequacy ratio of SPD Bank hit 10.16 percent and 6.76 percent respectively, lower than the regulatory requirements of 11 percent and seven percent.
Separately, China Mobile and SPD Bank signed a memorandum on March 10 to jointly develop mobile payment, mobile banking and related mobile commerce services.
