SHB recently announced its own merger plan with Habubank with key notes of conversion ratios; dividend plan; profit targets for 2013; 2014 and Deutsche Bank position.
Saigon-Hanoi Commercial Joint Stock Bank (SHB) recently announced its own merger plan with Hanoi Building Commercial Joint Stock Bank (Habubank or HBB) with key notes of conversion ratios; dividend plan; profit targets for 2013; 2014 and Deutsche Bank position as follows:
“Old” SHB shares will be converted into new SHB ones at 1.21-for-1 ratio. That means every old SHB shares will be converted into 1.21 new SHB shares. Meanwhile, HBB shares will be converted at 0.75-for-1 ratio, meaning every HBB share will be equal to 0.75 new SHB share.
The conversion ensures the regulation that par value of listed shares is VND10,000 each.
Shareholders of the newly-merged bank will not receive dividends this year as profits will be used to offset pre-merger accumulated losses of HBB. Of note, the merged entity would be exempted 100 percent from corporate taxes in the next two years [until 2014].
Regarding its business plan, the ‘new’ SHB targeted its pre-tax profit to reach VND1.85 trillion in 2012 and to climb to VND2.115 trillion in 2013. Particularly, the merged bank expects its profit to rise 15-20 percent in 2014.
Deutsche Bank AG is currently a strategic partner of HBB with 10 percent stake holding. However, Deutsche Bank is estimated to hold less than 5 percent stake in the merged bank due to the dilution effects. According to SHB, there are two possible scenarios:
(1) Deutsche Bank will sell its stake to existing shareholders; or
(2) Deutsche Bank maintains its stake via raising its capital contribution to become strategic partner of post-merger bank, provided that Deutsche Bank has long-term commitment with SHB and supports SHB in terms of development strategies, technology and human resources training.
SHB’s management will discuss in details with Deutsche Bank to ensure transparency and the rights of each party, the HNX-listed lender said.