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Overview

CDB provides $48 million loan to the Hualing Group for the acquisition of a 90% interest in Georgia's JSC BasisBank (Linked to Record ID#67721)

Commitments (Constant USD, 2023)$52,023,256
Commitment Year•2012Country of Activity•GeorgiaDirect Recipient Country of Incorporation•China (People's Republic of)Sector•Banking And Financial ServicesFlow Type•Loan

Status

Project lifecycle

Completion

Pipeline: PledgePipeline: CommitmentImplementationCompletion

Timeline

Key dates

Commitment date
Jul 7, 2012
Start (actual)
Jun 28, 2012
End (actual)
Jun 28, 2012

Stakeholders

Organizations involved in projects and activities supported by financial and in-kind transfers from Chinese government and state-owned entities

Ultimate beneficial owners

At least 25% Chinese ownership

Funding agencies

State-owned Policy Banks

  • China Development Bank (CDB)

Cofinancing agencies

State-owned Policy Banks

  • Export-Import Bank of China (China Eximbank)

Receiving agencies

Private Sector

  • Xinjiang Hualing Industry & Trade (Group) Co., Ltd. (Hualing Group)

Implementing agencies

Private Sector

  • JSC BasisBank
  • Xinjiang Hualing Industry & Trade (Group) Co., Ltd. (Hualing Group)

Loan desecription

CDB provides $48 million loan to the Hualing Group for the acquisition of a 90% interest in Georgia's JSC BasisBank

Interest type•Unknown

Narrative

Full Description

Project narrative

In 2012, China Development Bank (CDB) issued a loan worth approximately $48 million to private Chinese company Xinjiang Hualing Industry & Trade (Group) Co., Ltd. (also known as the Hualing Group) to partially finance the Hualing Group's acquisition of a 90% controlling interest in Georgia's JSC BasisBank. The Hualing Group bought the 90% stake from the European Bank for Reconstruction and Development (EBRD), the Chairman of the bank's supervisory board, Zurab Tsikhistavi, and other shareholders of the bank. The Xinjiang Branch of Export-Import Bank of China also issued a loan worth approximately $30 million to the Hualing Group the same year for the same purpose (as captured via Record ID#67721). The proceeds from the CDB and China Eximbank loans covered nearly 80% ($78 million) of the approximately $98 million acquisition. The Hualing Group formally acquired BasisBank on June 28, 2012. Upon acquiring BasisBank, the Hualing Group announced the opening of an RMB cross-border settlement business, thereby enabling the free exchange of RMB and the local currency, the lari. The final contract was announced on July 7, 2012. This was the first ever instance of a private Chinese company acquiring a foreign bank.

Staff comments

1. The Chinese name of the project is 新疆华凌集团收购格鲁吉亚贝西斯银行. 2. The Hualing Group applied for an approximately $98 million loan from China Development Bank (CDB), but CDB approved a loan for only half of that amount (see "国开行贷款助力 新疆华凌收购格鲁吉亚银行"). A weekinchina.com source identifies the face value of the loan as around $48 million, which is what AidData has chosen as the approximate loan amount (see "Georgia on my mind"). 3. JSC BasisBank (also known as Basis Bank) was founded in 1993 and was the only bank in Georgia to have a diversified Georgian shareholding and no foreign ownership or support in its creation. It offered a full range of services to physical and legal entities. The EBRD eventually became the bank's shareholder, but the bank, wanting more robust growth, more market share, more development, and an infusion of additional capital, searched for a strategic investor. It settled on the Hualing Group. By the end of 2014, the Hualing Group held a 92.78% share in the bank, while the EBRD and Zurab Tsikhistavi sold their remaining shares. The equity growth caused by the Hualing Group's acquisition of the stake was said to have offered greater stability, better service quality, and more financial opportunities to BasisBank.