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Chinese Hualing Group to acquire Georgia’s BasisBank

On June 28th, China’s Xinjiang Hualing Industry & Trade (Group) Co., Ltd (the "Hualing Group") agreed to acquire 90% equity stake in JSC BasisBank (the “Bank”) from European Bank for Reconstruction and Development (“EBRD”), Zurab Tsikhistavi, Chairman of the Bank’s Supervisory Board, as well as other shareholders of the Bank.

EBRD, the Bank’s single institutional shareholder, and Mr. Zurab Tsikhistavi, the founder of the Bank, will each retain a minority equity stake in the Bank after closing of the transaction. Mr. Zurab Tsikhistavi will remain the Chairman of the Board.

The Hualing Group plans to invest additional capital in the Bank to strengthen and promote its sustainable growth and development. BasisBank also plans to provide trade finance and settlements services as well as other products to support trade and investment activities of Chinese enterprises. Hualing Group will continue to explore cooperation opportunities with the EBRD to implement international banking best practices in the BasisBank.

“Hualing Group will further expand the Bank’s service network, providing financial services to the local SMEs and micro businesses in Kutaisi, a western industrial city of a strategic importance, where the Hualing Group has invested in the Free Industrial Zone”, said Mr. Zhang Jun, Deputy general Manager of Hualing Group. “BasisBank will be in a favourable and unique position to expand its client base with Chinese enterprises as well as extend the business further into Central Europe and Central Asia as an overseas financial service platform”, added Mr. Zhang.

In this acquisition, Hualing Group retained Shanghai TuHong Investment Management Ltd. (“TuHong International”), a boutique investment bank in China, as its exclusive financial advisor.

This acquisition is the first case for a Chinese private enterprise to acquire a foreign commercial bank, representing a significant step for Chinese private enterprises to diversify and expand business overseas, including the financial sector.

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