SCB to acquire ANZ project finance portfolio

29 October 2004
ANZ Investment Bankhas signed a memorandum of understanding for the sale to Standard Chartered Bank (SCB)of its London-based project and structured finance portfolio, covering the Middle East, Africa, South Asia, Europe and the Americas. The sale is subject to due diligence and is expected to be completed by December.

Under the terms of the deal, SCB will acquire loans and commitments of about $1,500 million. ANZ will continue to operate leasing and structured asset finance, structured export finance, and mergers and acquisitions activities in the regions in question. The bank attributed the sale to a broader international restructuring programme aimed at reducing foreign risk exposure.

SCB will honour all the existing mandates and commitments of ANZ, which has a number of live mandates in the Middle East. Both SCB and ANZ are among the mandated lead arrangers on the Bahrain Petroleum Company (Bapco)debt financing, and ANZ has mandates to advise Saudi Arabian Mining Company (Maaden)on its minerals railway project, to advise Saudi Arabia's National Polypropylene Company (Alfasel)on its commercial lending requirements and to advise the US' Intergenon its exit from Egypt's Sidi Krier power project. 'ANZ will continue to honour its contractual obligations under existing mandates during due diligence and it is expected that we will agree with the client that SCB will carry on the mandate after completion [of the deal] in the most consistent and seamless way for the client that we and SCB can achieve,' says an ANZ spokesperson.

It is understood that ANZ staff affected by the divestment will be transferred to SCB. 'The business is being sold to SCB as a going concern so includes both the assets and the staff,' says the spokesperson. 'SCB doesn't have much of a project finance business so there won't be a great deal of overlap between capabilities,' says a banking source. 'Obviously, any disruption like this creates some anxiety, but my understanding is that the sale includes staff, and since SCB has a stronger commitment to emerging markets than ANZ, the deal could actually open up opportunities.'

The deal between the two banks has a history. In 2000, ANZ sold the Middle East and South Asian operations of ANZ Grindlays Bank - which focused on commercial and retail banking - to SCB in order to concentrate on its traditional investment banking strength (MEED 12:5:00).

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