Huge debts: Chinese megabanks financed the government’s purchase of Vodafone
The government-supported acquisition of the Hungarian branch of Vodafone was finalised. As a result of the deal, the Hungarian state received a 49 percent stake in the telecommunications company. The other 51 percent went to 4iG, a partner in the purchase, well-known for being close with the government.
As we wrote, the HUF 660 billion (HUF 1.75 billion) transaction was not a cheap one. (Acquisition closed: Vodafone to disappear from Hungary) To help finance the acquisition, 4iG borrowed EUR 750 million from the state-owned Eximbank (export-import bank). In this case, however, the bank only played the role of mediator between the company and a consortium of different banks, all of whom contributed to the loan. We now have a complete list of those financial institutions which took part in the process, Telex reported.
Chinese interests
Back in February, 4iG CEO Péter Fekete only identified JP Morgan as one of the participants of the consortium. We know now that a large bulk of the money came from so-called Chinese policy banks. These are all commercial banks, but they serve investment, development, import and export interests. As such, the Chinese state uses these institutions for their economic interests as well, for example when financing international projects.
These 4 megabanks are:
– ICBC (Industrial and Commercial Bank of China),
– CCB (China Construction Bank),
– ABC (Agricultural Bank of China),
– BOC (Bank of China)
They are the 4 largest banks in the world, all of them work with budgets of USD 4000-5000 billion.
As it’s reflected in the names, there is a sense of distinction when it comes to the field of investment. They are technically private companies, but the Chinese state holds a significant share in all of them, they are all based in Beijing, and their leaders occupy important roles in government and in the Chinese Communist Party. With the exception of ABC, these banks all took the lion’s share worth of the funding in the loan given by Eximbank.
Economic or political decision?
However, it was not only the Chinese banks that financed the loan. We can also add JP Morgan to the list, the Italian Intesa-group, and Hüsnü Özyeğin Turkish millionaire (through the use of a Dutch bank). This means that the money lent by Eximbank included Chinese, Anglo-Saxon, Italian and Turkish funds. Overall, this distribution makes it a low-risk investment for the banks included.
As of now, we do not have any information whether these donors were approached specifically, or if there was any competition. Regardless, the Chinese banks without a doubt dominate the consortium. It’s also yet unclear if the composition of the syndicate was based on market preferences by JP Morgan, or the inclusion of the Chinese partners was possibly decided on a higher political level.
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Source: Telex
It is FACT, that Political Party’s in the Hungarian system, the number, absolutely CRIPPLES makes over-all nil effect to the OPPOSING challenging effectively the Orban Government.
They are Nondescript.
If Hungary had an effective opposition to Government criteria instead of what we have, that plays games amongst each other, distanced from having a “Common Ground” on issues, that we known, are DESTROYING us as a country, just letting the Orban Government run RIOT, in the implementation of there Policies, that are capitulating us as a country further into an UGLY deep Black Hole.
The “Arsenal” out there that could and SHOULD be used, in applying HUMONGOUS pressure on the Orban Government, that has PLACED us as a country in this diabolical place, receives no or little effective OPPOSTION attention.
This article – adds to the PILE of MATTERS – that Victor Orban -should have to explain and Answer.
Orban may have as he does the numbers, but OPPOSITION with any real IMPACT in Hungary – APPALLING, that just “feeds” the destructive course that the Orban Government pursue.
It’s quite scary when Politicians, based on ideological grounds (why not let business be business, without public involvement) decide to commit long term to a host of actors you’d prefer not be indebted to – in order to clinch this deal?
Any opinions from the folks who generally have a better sense as to how our Politicians think?