Standard Chartered has signed an MOU with ANZ to purchase part of the Australian bank's global project finance business. The deal is expected to close by December 2004 although no price has yet been agreed.
The purchase will see Standard Chartered acquire $1.5 billion in loans and commitments as well as a team of 60 bankers in offices in London, New York, Mumbai and Bahrain. According to ANZ, the final price paid is not likely to be substantially above the book value of the assets.
Most of the loans are for projects based in the Middle East and South Asia, reflecting ANZ's historic presence in those two markets. There are also sizeable parts of the portfolio based in Africa, Europe and the Americas. However, ANZ's project finance businesses in Australia, New Zealand and East Asia are not being sold nor are its global leasing and structured asset finance, structured export finance and mergers and acquisitions businesses.
According to Paul Marriage, Standard Chartered's head of communications based in London, the American assets will decrease as a portion of the whole as time goes by, reflecting Standard Chartered's small presence in the western hemisphere. It was not specified whether this would be through a further sale of those assets or by dilution of their proportion through a growth of the overall book.
The purchase is the latest manifestation of Standard Chartered's strategy of trying to service more of its existing clients' banking needs by bolt on acquisitions. As such, Marriage says there is some overlap between the clients it already has and those whose assets it is buying from ANZ. "This [acquisition] will help deepen the relationships we have with our customers," he said.
At the moment it is undecided where the project finance business will sit within the Standard Chartered organization. However, Marriage said that it might be "appropriate" for it to fall under the purview of Visnewathan Shankar, who runs the bank's global corporate finance business out of Singapore. Working with Shankar in that division is Tim Rathvon, who used to run Bank of America's project finance business in Asia in the mid 1990s.
ANZ's Asian project finance team, headed by Vijay Sethu will remain in place in Singapore and Hong Kong. However, earlier this month, a leading member of the team, Paul Sempere, departed the bank after nearly ten years of service. Sempere has now joined Deutsche Bank, where he is working in the integrated credit trading department, part of the global markets division. He is responsible for the origination of project and leveraged finance deals across a range of infrastructure sectors throughout Asia.
