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Oaktree Set to Take Control of Almatis Under $1 Billion Debt Restructuring

by on March 10, 2010

By Patricia Kuo March 10 (Bloomberg) — Oaktree Capital Management LLC , a Los Angeles-based investment fund, is poised to take control of alumina products-maker Almatis under the terms of the company’s $1 billion debt restructuring. Oaktree will take 86.5 percent of Almatis’s equity under the plan, which has been approved by two thirds of the Frankfurt-based company’s senior lenders, according to a presentation seen by Bloomberg News. In exchange, senior lenders will write down Almatis’s loans to between 45 cents and 86.5 cents on the dollar in a so-called debt-for-equity swap. Almatis said in a statement today it’s “pleased that a consensus has been reached by a majority of its senior lenders and is presently considering its response to this development.” Banks including UBS AG and Bahrain-based Arab Banking Corp. helped finance Almatis’s buyout in 2007 with $970 million of loans, including $235 million in junior debt. The company breached terms of the loans in the first half of last year as the global economic slowdown hurt demand for its products. Dubai International Capital LLC, the state-owned investment company that bought the alumina maker for an undisclosed amount in 2007, won’t recover its investment in Almatis unless it’s sold, according to the presentation, which was sent to senior lenders by their adviser, N.M. Rothschild & Sons Ltd., today. Junior lenders may recoup some of their money if the company is later sold for $325 million or more, according to the presentation. The proposal will allow Almatis to cut its debt to about $420 million and to seek protection from creditors under Chapter 11 bankruptcy, according to the presentation. Fiona Mulcahy , a London-based spokeswoman for Dubai International, declined to comment. An official at Oaktree Capital, which was founded in 1995 and has about $73 billion under management, also declined to comment. To contact the reporter on this story: Patricia Kuo in London at pkuo2@bloomberg.net

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Oaktree Set to Take Control of Almatis Under $1 Billion Debt Restructuring

China Minsheng Declines in Hong Kong Debut on Bank Capital-Raising Concern

by on November 25, 2009

By Bloomberg News Nov. 26 (Bloomberg) — China Minsheng Banking Corp. fell in its Hong Kong trading debut after raising HK$30.1 billion ($3.9 billion) in the city’s biggest public share sale since April 2007. Shares of the nation’s first privately owned lender slipped 1.3 percent to HK$8.96 at 10:02 a.m. local time. The company, whose Shanghai-traded stock has doubled this year, sold shares at HK$9.08 apiece, close to the mid-point of a range marketed to investors. Minsheng, the first Chinese bank in two and a half years to sell shares in Hong Kong, capitalized on the city’s stock market revival to help boost a capital ratio that was the second-lowest among China’s publicly traded lenders before the sale. Bigger rivals including Bank of China Ltd. have prepared plans to raise money after record lending eroded their finances. The bank’s six larger competitors that are listed in Hong Kong had an average 13.5 percent gain on their first day of trading, according to Royal Bank of Scotland Group Plc. Minsheng shelved a previous attempt to sell stock four years ago citing market conditions. Hong Kong’s benchmark Hang Seng Finance Index has gained 57 percent this year, led by financial shares. First-time stock sales in Hong Kong have raised HK$154 billion this year, and the territory is vying with mainland China for the status as the world’s biggest IPO market in 2009, according to data compiled by Bloomberg. Minsheng sold 3.32 billion new shares, or a 15 percent stake. International institutions ordered more than $34 billion of shares, and the Hong Kong portion of the sale got bids for 159 times the stock on offer, people familiar with the matter said last week. BOC International (Holdings) Ltd., China International Capital Corp., Haitong Securities Co., Macquarie Group Ltd. and UBS AG are managing the share sale. For Related News and Information: Top financial stories: FTOP Stories on China Banks: TNI CHINA BNK Banking industry debt and equity monitor: BANK Relative value comparison: 600016 CH RVC

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China Minsheng Declines in Hong Kong Debut on Bank Capital-Raising Concern

Barclays, Bank of America, JPMorgan Vie to Manage Indian Share Offerings

November 10, 2009

By Subramaniam Sharma Nov. 10 (Bloomberg) — Bank of America Merrill Lynch, Barclays Plc and JPMorgan Chase & Co. are competing to sell shares for state-run companies in India as the government plans the biggest sell-off in at least five years. Robert Morrice , Barclays Capital’s Asia-Pacific chairman, plans to double the London-based firm’s investment banking team in India as it vies to sell stock. JPMorgan hopes for a “slew of disinvestment” by state-run companies, said Kalpana Morparia , the New York-based bank’s chief executive officer in India. Prime Minister Manmohan Singh’s government pledged to cut holdings in its profitable companies to 90 percent, accelerating divestments after a five-year slowdown. The government may raise 256 billion rupees ($5.5 billion) from its publicly traded companies, Standard Chartered Bank said, and controls unlisted firms worth $144 billion, according to Morgan Stanley. “The competition for this business is always extremely fierce,” Kevan Watts , country head for Bank of America, said in an interview. “It is a big opportunity: we are talking to many people in the government about how we can help with the disinvestment process.” Indian share sales will add to an IPO rebound in Asia as record-low interest rates and economic stimulus packages fuel a revival in demand for new equities. China Minsheng Banking Corp. , Sands China Ltd., Malaysia’s Maxis Bhd. and India’s Emaar MGF Land Ltd. will lead more than $14 billion of sales in the region. ‘Prestigious Business’ While government offers are a “prestigious business,” they typically result in lower fees than private-sector sales, according to Bank of America. “It is not a very profitable business because the government, understandably, is not prepared to pay very high fees,” Watts said. Bank of America ranked seventh in advising on local sales this year, according to Bloomberg data. JPMorgan ranked sixth on domestic share sales, and first in overseas equity offerings by local firms. Singh, who won re-election in May, said on Nov. 8 he hopes government sales will accelerate. India netted $11 billion between 1991 and 2008 from asset sales, with the privatization wave slumping during Singh’s first term as communist allies thwarted plans. India’s benchmark stock index , which had risen every day since the government unveiled the stake-sale plan on Nov. 5, fell 0.4 percent today, limiting its gain for this year to 70 percent. NMDC Gains Companies that may sell stock include MMTC Ltd. , India’s largest international trading company, and NMDC Ltd. , the nation’s biggest mining company. NMDC gained 20 percent, climbing the most in almost seven months in Mumbai trading, after the steel ministry said it will initiate a plan next month to sell a stake in the company. Indian companies this year have raised 604 billion rupees from domestic shares sales, including private placements, rights offers, initial share sales and secondary sales, according to Bloomberg data. That’s less than the 782 billion rupees raised in 2007, before the global financial crisis sapped demand for equities. Of this, state-run companies led by NHPC Ltd. and Oil India Ltd. raised $2.05 billion, according to Bloomberg data. Last year, Rural Electrification Corp. led state companies in selling $1.06 billion of stock. Shares of hydroelectric power producer NHPC have dropped 11 percent since their Sept. 1 trading debut, valuing the company at 402.2 billion rupees. Rural Electrification , which began trading March 12, 2008, has more than doubled. To contact the reporters on this story: Subramaniam Sharma in New Delhi at ssharma@bloomberg.net

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China Minsheng Banking Plans to Raise Up to $4 Billion in Hong Kong Sale

November 8, 2009

By Bloomberg News Nov. 8 (Bloomberg) — China Minsheng Banking Corp. , the nation’s first privately owned lender, plans to raise as much as HK$31.54 billion ($4.07 billion) in an initial share sale in Hong Kong, said two people familiar with its plan. Minsheng will sell 3.32 billion shares, or a 15 percent stake, at HK$8.50 to HK$9.50 each, said the people, who declined to be identified before an official announcement. The top end of the range values the Beijing-based bank at 1.8 times its 2010 book value as estimated by banks involved in the sale, they added. BOC International (Holdings) Ltd., China International Capital Corp., Macquarie Group Ltd. and UBS AG are managing the sale. For Related News and Information: Top financial stories: FTOP Stories on China Banks: TNI CHINA BNK Banking industry debt and equity monitor: BANK Relative value comparison: 600016 CH RVC

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Yen Rises to Six-Week High Against Euro After U.S. Financial Shares Drop

September 1, 2009

By Ron Harui and Ye Xie Sept. 2 (Bloomberg) — The yen rose to a seven-week high against the euro on speculation Asian stocks will extend a global equity slide amid concern that U.S. financial institutions will incur more losses. Japan’s currency gained versus all of its 16 major counterparts after CIT Group Inc. said it is deferring interest payments on subordinated bonds due in 2067 because efforts to cover the payments have been unsuccessful. The euro was close to a two-week low versus the dollar after German Finance Minister Peer Steinbrueck said financing conditions may deteriorate when the nation’s economy recovers. “There are lingering worries about the health of the U.S. banking sector,” said Toshihiko Sakai , head of trading for foreign exchange and financial products at Mitsubishi UFJ Trust & Banking Corp. in Tokyo. “The bias is for the yen and the dollar to be bought.” The yen advanced to 131.51 per euro as of 8:45 a.m. in Tokyo from 132.19 in New York yesterday, after earlier reaching 131.46, the highest level since July 15. Japan’s currency rose to 92.55 per dollar from 92.92. The euro traded at $1.4208 from $1.4224 in New York yesterday, when it touched $1.4178, the weakest level since Aug. 19. The British pound declined to $1.6124 from $1.6160. Japan’s currency strengthened for a seventh day versus the euro after the Standard & Poor’s 500 Index fell 2.2 percent yesterday. U.S. banks on the West Coast still face credit deterioration and higher loan losses, said analysts at RBC Capital Markets. Bank Reserves “Many of these banks may still not have enough capital and reserves” to cushion against writedowns from worsening real estate market, analysts Joe Morford and David King wrote in a research report. The yen tends to gain in financial turmoil as the nation’s trade surplus reduces reliance on foreign capital, while the dollar benefits from its status as the world’s main reserve currency. Futures on Japan’s Nikkei 225 Stock Average expiring in September closed at 10,285 in Chicago yesterday, 2 percent lower than 10,500 in Osaka. To contact the reporter on this story: Ron Harui in Singapore at rharui@bloomberg.net

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