The State Bank of Vietnam (SBV) has approved in principal to the merger between Hanoi Building Commercial Joint Stock Bank (Habubank) and Saigon-Hanoi Commercial Joint Stock Bank (SHB).
The SBV approves the merger of Habubank and SHB
The SBV requested that the merger be conducted in accordance with circular No. 04/2010/TT-NHNN dated on February 11, 2010 on banking merging.
According to an undisclosed source touched by VnEconomy, SHB and Habubank had signed a memorandum of understanding (MoU) on the merger on March 7, 2012.
After the merger, Habubank will hand over all its assets and management to SHB, and the Habubank brand be replaced by SHB.
The two sides have agreed that 1.34 shares of Habubank will be equal to one share of SHB. New SHB shares will be issued to stockholders of Habubank.
SHB will be responsible for maintaining current contracts of all Habubank's employees, including benefits.
Habubank plans to hold a shareholder's meeting to ratify the merger by April 30, but timing of the actual merger depends on the final decision of SBV.
Afterwards, Habubank will not be able to take on any further debt or service responsibilities without the approval of SHB. Also, Habubank will not be allowed to increase pay for employees, contractors and service providers, or to make investments, unless they were agreements made before the signing of the MoU with SHB. They will also be restrained from liquidating assets without SHB approval.
After the signing of the MoU, neither side will be able to negotiate with a third party for another merger.
As part of the agreement, both parties have agreed to select Ernst & Young to provide auditing services, Vietcombank Securities Company act as consultant.
Earlier, top management at Habubank denied 'rumours' of a merger as late as a month into negotiations with SHB. Even though the rumours were officially denied, an anonymous official admitted that a tentative agreement had been made, and they were just waiting for approval from SBV.
