29th Sep 2006 07:23
Standard Chartered PLC29 September 2006 NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN OR INTO THE UNITED STATES, CANADA, AUSTRALIA OR JAPAN STANDARD CHARTERED TO ACQUIRE HSINCHU INTERNATIONAL BANK VIA A RECOMMENDED TENDER OFFER EQUITY PLACING TO RAISE APPROXIMATELY USD1.2 BILLION (GBP0.65 BILLION) A platform for growth in Asia's fifth largest economy Standard Chartered PLC ("Standard Chartered" or the "Company") announces thatits subsidiary company, Standard Chartered Bank, will today launch a recommendedtender offer for 100 per cent of the issued and to be issued share capital ofHsinchu International Bank ("Hsinchu"), the seventh largest private sector bankin Taiwan by loans and deposits as at 30 June 2006. The tender offer price ofNTD24.50 per share values Hsinchu's entire issued share capital at USD1.2billion (GBP0.65 billion) on a fully diluted basis. The acquisition, which issubject to a minimum acceptance condition of 51 per cent and to the satisfactionof remaining regulatory consents, is expected to be completed in November 2006. Standard Chartered has received irrevocable undertakings to accept the tenderoffer from shareholders representing 20.81 per cent of Hsinchu's issued sharecapital (on a fully diluted basis). KEY POINTS - Standard Chartered's strategic intent is to be the world's bestinternational bank, leading the way in Asia, Africa and the Middle East. Hsinchuprovides Standard Chartered with an attractive opportunity to strengthen itsposition in Taiwan, creating a new engine for growth. The offer will result inthe first outright acquisition of a Taiwanese bank by an international bank - Taiwan is the fifth largest economy in Asia with GDP of USD15,200per capita, comparable with Korea. Taiwan is the fourth largest banking marketin Asia, with a revenue pool of approximately USD29 billion in 2005(1). Althoughthe banking industry in Taiwan continues to be affected by the significantdownturn in the consumer credit cycle experienced since the second half of 2005,Standard Chartered believes that the cycle is turning and that Taiwan offersattractive growth prospects - Through Hsinchu, Standard Chartered will be strongly positioned tocapitalise on the huge expansion of trade and investment flows between Taiwanand the rest of Asia. Exports to mainland China increased by 750 per cent from2001 to 2005, with exports to mainland China, Hong Kong and Korea accounting forapproximately 39 per cent of total exports from Taiwan in 2005. Following theacquisition of Hsinchu, Standard Chartered's presence in the key North EastAsian markets of Korea, Taiwan, Hong Kong and mainland China will be one of thelargest of the international banks, with a network of over 580 branches,including 86 branches in Taiwan - Hsinchu is a well managed bank with a strong presence in the threewealthiest regions of Taiwan: Taipei, Taoyuan and Hsinchu. As at 30 June 2006,Hsinchu had total assets of approximately USD13 billion. It has over 2.4 millionconsumer deposit accounts and over 115,000 corporate and small and medium sizedenterprise ("SME") deposit accounts. Together with Standard Chartered's existingbusiness, the acquisition of Hsinchu would have made Taiwan Standard Chartered'sfourth largest market by income for the six months ended 30 June 2006 - Standard Chartered expects to achieve significant income synergiesand incremental expense savings through the acquisition. Strong double digitincome growth is expected in both Consumer and Wholesale Banking through theintroduction of Standard Chartered's products and sales practices to Hsinchu andby leveraging Standard Chartered's international network - The tender offer price of NTD24.50 per share represents: a premiumof 40 per cent to Hsinchu's closing share price of NTD17.45 on 28 September2006; 12.7 times Hsinchu's reported after tax earnings in 2005; and 2.3 timesHsinchu's reported net asset value as at 30 June 2006 - Standard Chartered intends to finance the acquisition with theproceeds of a placing of Standard Chartered PLC new ordinary shares forapproximately USD1.2 billion (GBP0.65 billion) launched today - The acquisition of Hsinchu is expected to be earnings accretive andachieve double digit return on investment ("ROI") in 2008 The acquisition constitutes a discloseable transaction of Standard Charteredunder the Rules Governing the Listing of Securities on The Stock Exchange ofHong Kong Limited (the "HK Listing Rules") and a circular containing furtherdetails of the acquisition will be despatched to shareholders of StandardChartered as soon as practicable in compliance with the HK Listing Rules. Bryan Sanderson, Chairman of Standard Chartered, said: "Taiwan is an important element of our Asia strategy. It is the fourth largestbanking market in Asia and is integral to the rapidly increasing economicactivity and trade flows in the region. We believe that the acquisition ofHsinchu is an excellent opportunity to create further value for ourshareholders." Mervyn Davies, Group Chief Executive of Standard Chartered, said: "Hsinchu is an outstanding opportunity to grow Standard Chartered's presence inone of our core markets. This is a well managed bank that will transform ourbusiness in Taiwan, and we will drive further growth by combining StandardChartered's and Hsinchu's products and processes as we have done successfully inother markets. President Wu and his team have done an impressive job in growingHsinchu and we are looking forward to working closely with them." ANALYSTS BRIEFING There will be a joint presentation for analysts and investors at 9.00am UK timethis morning. This presentation will take place at City Presentation Centre, 4Chiswell Street, Finsbury Square, EC1Y 4UP, and will be hosted by Mervyn Davies,Group Chief Executive, and Peter Sands, Group Finance Director. Analysts andinvestors based in Hong Kong will be able to attend the presentation at 4.00pmHK time at Bishopsgate Room, 30/F Standard Chartered Bank Building, 4-4A DesVoeux Road, Central, Hong Kong. A live listen-only audio dial-in to the presentation will be available bycalling: UK: +44 (0) 20 8515 2338 Hong Kong: +852 3009 5027 A live webcast of the presentation will also be available on the StandardChartered Investor Relations website from 9.00 am UK time/4.00 pm HK time. Ifyou are outside the United States, Canada, Australia or Japan you can accessthis on the following link. http://investors.standardchartered.com. A recordingof the webcast will also be available shortly after the event. CONTACTS Investors Stephen Atkinson Ruth Naderer Head of Investor Relations Head of Investor Relations, Asia Pacific +44 (0) 20 7280 7245 +852 2820 3075 [email protected] [email protected] Press Sean Farrell Rita Liu Head of Media Relations Head of Corporate Affairs, Hong Kong +44 (0) 20 7280 7163 +852 2820 3636 [email protected] [email protected] Roland Rudd Simon Moyse Finsbury Finsbury +44 (0) 20 7251 3801 +44 (0) 20 7251 3801 [email protected] [email protected] Advisers and Joint Lead Managers Jim Rushton Tim Waddell UBS UBS +44 (0) 20 7567 8000 +44 (0) 20 7567 8000 William Chalmers Paul Baker Morgan Stanley Morgan Stanley +44 (0) 20 7425 8000 +44 (0) 20 7425 8000 Joint Lead Managers John Paynter Phil Raper JPMorgan Cazenove Goldman Sachs +44 (0) 20 7588 2828 +44 (0) 20 7774 1000 This summary should be read in conjunction with the text of the fullannouncement which follows. This announcement has been issued by Standard Chartered and is the soleresponsibility of Standard Chartered. Morgan Stanley & Co. International Limited ("Morgan Stanley"), UBS Limited ("UBS"), Goldman Sachs International ("Goldman Sachs") and JPMorgan Cazenove ("Cazenove") are each acting exclusively for the Company and no-one else inconnection with the acquisition and the Placing. None of Morgan Stanley, UBS,Goldman Sachs or Cazenove will be responsible to anyone other than the Companyfor providing the protections afforded to their respective clients nor forproviding advice in relation to the acquisition or the Placing or any othermatter referred to in this announcement. This announcement is for information purposes only and does not constitute anoffer or an invitation to acquire or dispose of any securities or investmentadvice in any jurisdiction. In particular, this announcement does not constitutean offer to sell or issue or the solicitation of an offer to buy or subscribefor securities in the United States, Canada, Australia or Japan and should notbe relied upon in connection with any decision to acquire the Placing Shares orany other Standard Chartered securities. The securities referred to in thisannouncement have not been and will not be registered under the U.S. SecuritiesAct of 1933 (the "U.S. Securities Act") and may not be offered, sold ortransferred within the United States except pursuant to an exemption from, or ina transaction not subject to, the registration requirements of the U.S.Securities Act. No public offering of the Placing Shares will be made in theUnited States. This announcement includes "forward-looking statements". All statements otherthan statements of historical fact included in this announcement, including,without limitation, those regarding Standard Chartered's and Hsinchu's financialposition, business strategy, plans and objectives of management for futureoperations, are forward-looking statements. Such forward-looking statementsinvolve known and unknown risks, uncertainties and other factors which may causethe actual results, performance or achievements of Standard Chartered's orHsinchu's, or industry results, to be materially different from any futureresults, performance or achievements expressed or implied by suchforward-looking statements. Such forward-looking statements are based onnumerous assumptions regarding Standard Chartered's or Hsinchu's present andfuture business strategies and the environments in which Standard Chartered andHsinchu will operate in the future and such assumptions may or may not prove tobe correct. There are a number of factors which could cause actual results,performance of Standard Chartered or Hsinchu, or industry results to differmaterially from those expressed or implied in forward looking statements. Amongthe factors that could cause actual results, performance of Standard Charteredor Hsinchu, or industry results to differ materially from those described in theforward looking statements are Standard Chartered's ability to successfullycombine the business of Standard Chartered and Hsinchu and to realise expectedsynergies from that combination, changes in global, political, economic,business, competitive, market and regulatory forces, future exchange andinterest rates, changes in tax rates and future business combinations ordispositions. These forward-looking statements speak only as of the date ofthis announcement. Standard Chartered expressly disclaims any obligation (exceptas required by the rules of the UK Listing Authority and the London StockExchange or the Listing Rules of the Hong Kong Stock Exchange) or undertaking todisseminate any updates or revisions to any forward-looking statement containedherein to reflect any change in Standard Chartered's expectations with regardthereto or any change in events, conditions or circumstances on which any suchstatement is based. No statement in this announcement is intended to be a profit forecast and nostatement in this announcement should be interpreted to mean that earnings pershare of Standard Chartered for the current or future financial years wouldnecessarily match or exceed the historical published earnings per share ofStandard Chartered. NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN OR INTO THE UNITED STATES, CANADA, AUSTRALIA OR JAPAN STANDARD CHARTERED TO ACQUIRE HSINCHU INTERNATIONAL BANK VIA A RECOMMENDED TENDER OFFER EQUITY PLACING TO RAISE APPROXIMATELY USD1.2 BILLION (GBP0.65 BILLION) A platform for growth in Asia's fifth largest economy TAIWAN AND HSINCHU Hsinchu represents an attractive opportunity to significantly enhance StandardChartered's presence in Taiwan. Taiwan is the fifth largest economy in Asia andis Asia's fourth largest banking market, with a revenue pool of approximatelyUSD29 billion in 2005. Taiwan has a population of approximately 23 million withan attractive demographic profile and its GDP per capita is one of the highestin Asia (comparable with that of Korea). Taiwan is integral to StandardChartered's Asia strategy, with Taiwanese investment in mainland China andTaiwan-related trade flows having grown significantly in recent years. Exportsto mainland China increased by 750 per cent from 2001 to 2005, and account for21 per cent of total Taiwanese exports. Hong Kong accounted for a further 15 percent of total Taiwanese exports in 2005. Following the acquisition of Hsinchu,Standard Chartered will have a significant presence in the key North East Asianmarkets of Korea, Taiwan, Hong Kong and mainland China with a network of over580 branches, making it one of the largest international banks in the region. Hsinchu was established by three local families in 1948 as a savingsassociation, and in 1983 was the first private sector bank to list on the TaiwanStock Exchange. At 28 September 2006, Hsinchu had a market capitalisation ofUSD861 million. Hsinchu has a strong presence in the three wealthiest regions inTaiwan: Taipei, Taoyuan and Hsinchu. Some of the world's largest, and Taiwan'sfastest growing, technology companies are located in Hsinchu's Science Park.Hsinchu: - is the seventh largest private sector bank in Taiwan by loans anddeposits as at 30 June 2006 - provides Consumer and Wholesale Banking products and servicesthrough its network of 83 branches - provides its customers with a range of products and servicesincluding deposits, mortgages, consumer loans, credit cards, wealth management,trade finance and foreign exchange - has an extensive customer base, consisting of over 2.4 millionconsumer deposit accounts and over 115,000 corporate and SME deposit accounts - had more than 3,300 employees as at 30 June 2006 In recent years, Hsinchu's management has transformed the business, building asignificant Consumer Banking business, investing in technology and prudentlymanaging its loan portfolio. Hsinchu has a market share of approximately 10 percent in both deposits and loans in the regions of Taoyuan and Hsinchu. Based on Taiwanese GAAP accounts as at 30 June 2006, Hsinchu reported: - total assets of approximately NTD419 billion (USD12.7 billion) - total loans of approximately NTD298 billion (USD9.1 billion) - net assets of approximately NTD17 billion (USD527 million) For the 12 months ended 31 December 2005, Hsinchu recorded profit before tax ofapproximately NTD3,344 million (USD102 million) and profit after tax ofapproximately NTD3,191 million (USD97 million). For the equivalent period in2004, Hsinchu recorded profit before tax of approximately NTD3,014 million(USD92 million) and profit after tax of approximately NTD2,808 million (USD85million). For the six months ended 30 June 2006, Hsinchu recorded a loss beforetax of approximately NTD3,132 million (USD95 million) and loss after tax ofapproximately NTD2,733 million (USD83 million) owing to provisions ofapproximately NTD6,276 million (USD191 million) primarily reflecting theconsumer credit conditions experienced by all market participants. Hsinchu's consumer loans represent 51 per cent of total assets, with mortgagesrepresenting 23 per cent, personal loans 13 per cent, SME loans 11 per cent andcredit and cash cards less than 1 per cent of total assets respectively.Hsinchu's wholesale loans and other assets represent the remaining 49 per centof total assets. Hsinchu had a non-performing loan ("NPL") ratio of 2.77 percent as at 30 June 2006, 2.46 per cent as at 31 December 2005 and 2.83 per centas at 31 December 2004. It had a total capital ratio of 9.81 per cent as at 30June 2006. 25 per cent of unsecured consumer receivables in the Taiwanesebanking sector are subject to restructuring under the government initiative "Interbank Debt Restructuring Programme", compared to less than 10 per cent ofHsinchu's unsecured consumer receivables which have elected to enter the scheme. DETAILS OF THE ACQUISITION Standard Chartered will today launch a recommended tender offer for 100 per centof the issued and to be issued share capital of Hsinchu. The tender offer priceof NTD24.50 per share values Hsinchu's entire issued share capital at USD1.2billion (GBP0.65 billion) on a fully diluted basis. The recommended tenderoffer, which is subject to a minimum acceptance condition of 51 per cent andsatisfaction of remaining regulatory consents, is expected to be completed inNovember 2006. The tender offer price will be payable by Standard Charteredwithin five business days after the closing of the tender offer. Hsinchu's board of directors is recommending shareholders to accept StandardChartered's tender offer. In addition, Standard Chartered has receivedirrevocable undertakings to accept the tender offer from shareholdersrepresenting 20.81 per cent of Hsinchu's issued share capital (on a fullydiluted basis), including a commitment from the Fubon Group of Companies of 6.79per cent. On 28 September 2006 Standard Chartered received regulatory approval from theFinancial Supervisory Commission in Taiwan to acquire 51 to 100 per cent of theissued share capital of Hsinchu. In addition, the Fair Trade Commission hasgranted a waiver from the requirement to obtain the Commission's approval forthe tender offer. The material outstanding regulatory approval is the approvalfor foreign investment from the Investment Commission of the Ministry ofEconomic Affairs. It is the intention of Standard Chartered to delist Hsinchu, subject toregulatory consent and Hsinchu shareholder approval, and to acquire 100 per centof the issued and to be issued share capital of Hsinchu. Standard Charteredintends to combine its existing Taiwanese operations with Hsinchu by late 2007. To the best of the knowledge, information and belief of Standard Chartered'sDirectors, having made all reasonable enquiry, Hsinchu's shareholders are thirdparties, independent of Standard Chartered and connected persons or relatedparties of Standard Chartered. ACQUISITION RATIONALE AND BENEFITS Hsinchu represents an attractive opportunity for Standard Chartered: - The Taiwanese economy is the fifth largest in Asia and continues todemonstrate good growth with forecast average annual real GDP growth of 4.3 percent(2) between 2007 and 2010. This growth is underpinned by increasing tradeflows, especially with mainland China and the rest of Asia (total Taiwaneseexports increased by 57 per cent from 2001 to 2005, with export growthaccelerating from 8 per cent in 2005 to 14 per cent in the first seven months of2006). Taiwan also has one of the largest and highest growth technology sectorsin the world and a young and increasingly affluent population, particularly inthe Taoyuan and Hsinchu regions where Hsinchu has a leading market position - The Taiwanese banking revenue pool is the fourth largest in Asiawith an estimated size in 2005 of USD29 billion. Hsinchu provides StandardChartered with an opportunity for significant income and earnings growth in bothConsumer and Wholesale Banking in Taiwan through the introduction of its salespractices and innovative products and by leveraging its international network,particularly in the North East Asia region - The acquisition will transform Standard Chartered's existing marketposition in Taiwan and further diversify Standard Chartered's earnings base.Together with Standard Chartered's existing business, the acquisition of Hsinchuwould have made Taiwan Standard Chartered's fourth largest market by income forthe six months ended 30 June 2006 - Hsinchu has an impressive track record of growth driven by a stronglocal management team. The combination of Standard Chartered's existing businessand Hsinchu will provide an excellent platform for expansion across Taiwan Standard Chartered will look to further grow Hsinchu's income and profitssignificantly in ways that will include: Consumer Banking - Using Standard Chartered's customer segmentation methodology toenable further penetration and cross-selling of more profitable products to theaffluent customer segments - Using Standard Chartered's network management skills and processesto expand and enhance distribution through branch reconfiguration and relocationto the extent permissible under Taiwanese law, increased productivity andefficiency, and by developing an effective direct sales channel. Through theimplementation of these skills and processes, Standard Chartered aims tosignificantly increase Hsinchu's deposits per branch from the current NTD4billion towards the NTD12 billion reported by the top three banks in Taiwan - Using Standard Chartered's skills and experience, together with itsperformance-driven management model, to drive product and service development - Implementing a broader suite of wealth management and bancassuranceproducts and accelerating SME, credit card and mortgage strategies throughproduct and service innovation. Standard Chartered's objective is tosignificantly grow the contribution of wealth management income. Wealthmanagement contributed less than 15 per cent of Hsinchu's Consumer Bankingincome in 2005 and Standard Chartered will grow this towards the Group's averageof over 30 per cent - Sharing best practice techniques in customer service, credit scoringand risk management Wholesale Banking - Leveraging Standard Chartered's international network andrelationship management expertise together with Taiwan's and Hsinchu's linkswith Hong Kong and mainland China (over 70 per cent of Hsinchu's corporatecustomers have operations in mainland China), to grow the client base in theglobal corporate and local corporate segments, and to improve Hsinchu'scross-sell ratio - Building on Standard Chartered's international product expertise torealise opportunities in trade finance, global markets and regional cashmanagement for Hsinchu's domestic corporate clients and for Standard Chartered'sinternational clients - Leveraging Hsinchu's network and infrastructure to enhance servicesfor global corporates - Reinvigorating the product and service offering to the localcorporate segment and deepening relationships with companies from Hsinchu'stechnology sector - Growing fee-income products in global markets, such as foreignexchange, derivatives and structured finance, and capturing cross border tradeflows Other - Achieving incremental cost efficiencies, as Standard Charteredcombines its existing business with Hsinchu. Standard Chartered anticipates thatsteady-state pre-tax cost synergies will amount to approximately USD20 millionper year. This will be achieved through removing duplication in the twoentities. Standard Chartered does not plan to reduce headcount, and willredeploy resources to support rapid growth in the business with controlled costgrowth - Benefiting from reduced funding costs, as a result of StandardChartered's stronger credit rating and broader access to funding STANDARD CHARTERED IN TAIWAN Standard Chartered's presence in Taiwan was established in 1985. It operatestoday through three branches and has over 900 employees. As at 30 June 2006, ithad assets of approximately USD3 billion. Standard Chartered has both Consumerand Wholesale Banking businesses in Taiwan. FINANCIAL IMPACT OF THE ACQUISITION Standard Chartered Bank will today launch a recommended tender offer forHsinchu's entire issued and to be issued share capital at NTD24.50 in cash perHsinchu share. This values Hsinchu's entire issued share capital at USD1.2billion, or GBP0.65 billion, on a fully diluted basis representing a premium of40 per cent to Hsinchu's closing share price of NTD17.45 on 28 September 2006;12.7 times Hsinchu's reported after tax earnings in 2005 and 2.3 times Hsinchu'sreported net asset value as at 30 June 2006. Standard Chartered prepares its financial statements in accordance withInternational Financial Reporting Standards as adopted by the EU (IFRS).Following completion of the transaction, Standard Chartered will make certainIFRS and fair value adjustments in respect of the Hsinchu balance sheet thatwill be included in Standard Chartered's consolidated financial statements. Inparticular, in respect of the consumer loan portfolio, Standard Charteredestimates that were it to apply its IFRS policies and fair value adjustments asat 30 June 2006, the impact would be to reduce Hsinchu's tangible net assets byapproximately USD100 million. Standard Chartered intends to finance the acquisition of Hsinchu with theproceeds of a placing of new ordinary shares of USD0.50 each to raiseapproximately USD1.2 billion (GBP0.65 billion) (the "Placing"). Assuming thatthe acquisition of 100 per cent of the fully diluted share capital of Hsinchuand that the Placing had completed at 30 June 2006, and including the impact ofthe recently announced acquisition of Union Bank Limited of Pakistan and theincrease in Standard Chartered's stake in PT Bank Permata Tbk, StandardChartered's tier 1 ratio would have been in the range of 7.5 per cent to 7.7 percent and its core equity ratio would have been in the range of 5.7 per cent to5.9 per cent. Based on Standard Chartered's forecasts for business growth and transactionbenefits, the acquisition is expected to be earnings accretive and achievedouble digit ROI in the full year ending 31 December 2008. The Directors of Standard Chartered consider the terms of the acquisition to befair and reasonable and that the transaction is in the interests of the StandardChartered Group and its shareholders as a whole. THE PLACING Morgan Stanley, UBS, Goldman Sachs and Cazenove (together, the "Managers") areacting as joint lead managers to the Placing. The Placing will be conducted inaccordance with the terms and conditions set out in the Appendix. The Placingwill be effected, subject to the satisfaction of certain conditions, by way ofan accelerated bookbuild placing of ordinary shares of USD0.50 each in thecapital of Standard Chartered (the "Placing Shares"). The placing price inrespect of the Placing Shares will be agreed by the Managers and StandardChartered at the close of the bookbuilding exercise. There has been no equityfund raising exercise by Standard Chartered in the 12 months immediatelypreceding the date of this announcement. The books will open with immediate effect. The timing of the closing of thebooks, pricing and allocations is at the discretion of the Managers and StandardChartered. Details of the placing price will be announced as soon as practicableafter the close of the bookbuilding exercise. The Placing Shares will be credited as fully paid and will rank pari passu inall respects with the existing ordinary shares of USD0.50 each in the capital ofStandard Chartered including the right to receive all dividends and otherdistributions declared, made or paid after the date of issue, save they will notrank for the interim dividend of USD0.2083 per share in respect of the sixmonths ended 30 June 2006 declared on 8 August 2006 and payable on 11 October2006. The ordinary shares of Standard Chartered are listed on the Official Listmaintained by the UK Listing Authority (the "Official List") and are also listedon The Stock Exchange of Hong Kong Limited (the "Hong Kong Stock Exchange").Application will be made for the Placing Shares to be admitted to the OfficialList to be admitted to trading by the London Stock Exchange plc (the "LondonStock Exchange") on its market for listed securities ("UK Admission") and to theHong Kong Stock Exchange for listing of and permission to deal in the PlacingShares on the Hong Kong Stock Exchange. The Appendix to this announcement (which forms a part of this announcement) setsout further information and the terms and conditions of the Placing. The Placing Shares will be issued under the general mandate granted by theCompany's shareholders on 4 May 2006 to issue up to 263,973,974 shares. None ofthis mandate has been used. CURRENT TRADING Overall, the Group's progress during the second half of 2006, including thecredit outlook in Taiwan, continues to be in line with the guidance given at theInterim Results Presentation on 8 August 2006. For the Group, the guidance stated that "the outlook is positive, and we expectcontinued good income momentum. We will maintain our focus on expense managementand expense growth should be broadly in line with income growth for the fullyear. We will continue to take a balanced approach to risk, whilst recognisingthe changes in the external environment". For Taiwan the guidance stated "recentindications are that conditions continue to improve and it is expected thatthere will be a sharp reduction in the loan impairment charge in Taiwan in thesecond half of the year. However, given recent and prospective regulatorychanges, there remains considerable uncertainty about the evolution of theconsumer credit market". BUSINESS DESCRIPTION Standard Chartered PLC is listed on both the London Stock Exchange and the HongKong Stock Exchange and is consistently ranked in the top 25 among FTSE-100companies by market capitalisation. Standard Chartered has a history of over 150 years in banking and operates inmany of the world's fastest-growing markets with an extensive global network ofover 1,200 branches (including subsidiaries, associates and joint ventures) inover 50 countries in the Asia Pacific Region, South Asia, the Middle East,Africa, the United Kingdom and the Americas. As one of the world's most international banks, Standard Chartered employsalmost 50,000 people, representing over 90 nationalities, worldwide. Thisdiversity lies at the heart of the Bank's values and supports the Bank's growthas the world increasingly becomes one market. With strong organic growth supported by strategic alliances and acquisitions anddriven by its strengths in the balance and diversity of its business, products,geography and people, Standard Chartered is well positioned in the emergingtrade corridors of Asia, Africa and the Middle East. Standard Chartered derives over 90 per cent of profits from Asia, Africa and theMiddle East. Serving both Consumer and Wholesale Banking customers worldwide,the Bank combines deep local knowledge with global capability to offer a widerange of innovative products and services as well as award-winning solutions. Trusted across its network for its standard of governance and corporateresponsibility, Standard Chartered takes a long term view of the consequences ofits actions to ensure that the Bank builds a sustainable business through socialinclusion, environmental protection and good governance. Standard Chartered is also committed to all its stakeholders by living itsvalues in its approach towards managing its people, exceeding expectations ofits customers, making a difference in communities and working with regulators. GENERAL This announcement has been issued by Standard Chartered and is the soleresponsibility of Standard Chartered. Morgan Stanley, UBS, Goldman Sachs and Cazenove are each acting exclusively forthe Company and no-one else in connection with the acquisition and the Placing.None of Morgan Stanley, UBS, Goldman Sachs or Cazenove will be responsible toanyone other than the Company for providing the protections afforded to theirrespective clients nor for providing advice in relation to the acquisition orthe Placing or any other matter referred to in this announcement. This announcement is for information purposes only and does not constitute anoffer or an invitation to acquire or dispose of any securities or investmentadvice in any jurisdiction. In particular, this announcement does not constitute an offer to sell or issueor the solicitation of an offer to buy or subscribe for securities in the UnitedStates, Canada, Australia or Japan and should not be relied upon in connectionwith any decision to acquire the Placing Shares or any other Standard Charteredsecurities. The securities referred to in this announcement have not been andwill not be registered under the U.S. Securities Act of 1933 (the "U.S.Securities Act") and may not be offered, sold or transferred within the UnitedStates except pursuant to an exemption from, or in a transaction not subject to,the registration requirements of the U.S. Securities Act. No public offering ofthe Placing Shares will be made in the United States. This announcement includes "forward-looking statements". All statements otherthan statements of historical fact included in this announcement, including,without limitation, those regarding Standard Chartered's and Hsinchu's financialposition, business strategy, plans and objectives of management for futureoperations, are forward-looking statements. Such forward-looking statementsinvolve known and unknown risks, uncertainties and other factors which may causethe actual results, performance or achievements of Standard Chartered's orHsinchu's, or industry results, to be materially different from any futureresults, performance or achievements expressed or implied by suchforward-looking statements. Such forward-looking statements are based onnumerous assumptions regarding Standard Chartered's or Hsinchu's present andfuture business strategies and the environments in which Standard Chartered andHsinchu will operate in the future and such assumptions may or may not prove tobe correct. There are a number of factors which could cause actual results,performance of Standard Chartered or Hsinchu, or industry results to differmaterially from those expressed or implied in forward looking statements. Amongthe factors that could cause actual results, performance of Standard Charteredor Hsinchu, or industry results to differ materially from those described in theforward looking statements are Standard Chartered's ability to successfullycombine the business of Standard Chartered and Hsinchu and to realise expectedsynergies from that combination, changes in global, political, economic,business, competitive, market and regulatory forces, future exchange andinterest rates, changes in tax rates and future business combinations ordispositions. These forward-looking statements speak only as of the date ofthis announcement. Standard Chartered expressly disclaims any obligation (exceptas required by the rules of the UK Listing Authority and the London StockExchange or the Listing Rules of the Hong Kong Stock Exchange) or undertaking todisseminate any updates or revisions to any forward-looking statement containedherein to reflect any change in Standard Chartered's expectations with regardthereto or any change in events, conditions or circumstances on which any suchstatement is based. No statement in this announcement is intended to be a profit forecast and nostatement in this announcement should be interpreted to mean that earnings pershare of Standard Chartered for the current or future financial years wouldnecessarily match or exceed the historical published earnings per share ofStandard Chartered. The Directors of Standard Chartered are: Executive Directors: Bryan Sanderson CBE, Chairman Mervyn Davies CBE, Group Chief Executive Michael DeNoma, Group Executive Director Richard Meddings, Group Executive Director Kaikhushru Nargolwala, Group Executive Director Peter Sands, Group Finance Director Independent Non-Executive Directors: Hugh Norton, Independent Non-Executive Director Sir CK Chow, Independent Non-Executive Director James Dundas, Independent Non-Executive Director Rudolph Markham, Independent Non-Executive Director Ruth Markland, Independent Non-Executive Director Paul Skinner, Independent Non-Executive Director Oliver Stocken, Independent Non-Executive Director Valerie Gooding CBE, Independent Non-Executive Director Lord Turner, Independent Non-Executive Director The following exchange rates have been used in this announcement: USD1:NTD32.9 USD1:GBP0.53 APPENDIX Further Information on the Placing NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN OR INTO THE UNITED STATES, CANADA, AUSTRALIA OR JAPANIMPORTANT INFORMATION FOR PLACEES ONLY REGARDING THE PLACINGMEMBERS OF THE PUBLIC ARE NOT ELIGIBLE TO TAKE PART IN THE PLACING. THIS APPENDIX AND THE TERMS AND CONDITIONS SET OUT HEREIN ARE DIRECTED ONLY AT PERSONS WHOSE ORDINARY ACTIVITIES INVOLVE THEM IN ACQUIRING, HOLDING, MANAGING AND DISPOSINGOF INVESTMENTS (AS PRINCIPAL OR AGENT) FOR THE PURPOSES OF THEIR BUSINESS AND WHO HAVE PROFESSIONAL EXPERIENCE IN MATTERS RELATING TO INVESTMENTS AND ARE (1) QUALIFIED INVESTORS AS DEFINED IN SECTION 86(7) OF THE FINANCIAL SERVICES AND MARKETS ACT 2000 ("FSMA"), BEING PERSONS FALLING WITHIN THE MEANING OF ARTICLE 2.1(e)(i), (ii) OR (iii) OF DIRECTIVE2003/71/EC (THE "PROSPECTUS DIRECTIVE") AND (2) FALL WITHIN ARTICLE 19(5) OF THE FINANCIAL SERVICES AND MARKETS ACT 2000(FINANCIAL PROMOTION) ORDER 2005, AS AMENDED (THE "ORDER") OR ARE PERSONS WHO FALL WITHIN ARTICLE 49(2)(a) TO (d) ("HIGHNET WORTH COMPANIES, UNINCORPORATED ASSOCIATIONS, ETC") OF THE ORDER OR WHO ARE 'PROFESSIONAL INVESTORS' AS DEFINED IN THE SECURITIES AND FUTURES ORDINANCE (CAP. 571) OF HONG KONG AND ANY RULES MADE UNDER THAT ORDINANCE OR TO WHOM THEY MAYOTHERWISE LAWFULLY BE COMMUNICATED (ALL SUCH PERSONS TOGETHER BEING REFERRED TO AS RELEVANT PERSONS). THIS APPENDIX AND THE TERMS AND CONDITIONS SET OUT HEREIN MUST NOT BE ACTED ON OR RELIED ON BY PERSONS WHO ARE NOT RELEVANT PERSONS. PERSONS DISTRIBUTING THIS ANNOUNCEMENT (INCLUDING THIS APPENDIX) MUST SATISFY THEMSELVES THAT IT IS LAWFUL TO DO SO. ANYINVESTMENT OR INVESTMENT ACTIVITY TO WHICH THIS APPENDIX AND THE TERMS AND CONDITIONS SET OUT HEREIN RELATES IS AVAILABLE ONLY TO RELEVANT PERSONS AND WILL BE ENGAGED IN ONLY WITH RELEVANT PERSONS. THIS APPENDIX DOES NOT ITSELF CONSTITUTE AN OFFER FOR SALE OR SUBSCRIPTION OF ANY SECURITIES IN STANDARD CHARTERED PLC.This announcement and any offer if made subsequently is only addressed to and directed at persons in member states of the European Economic Area ("EEA") who are 'qualified investors' within the meaning of Article 2(1)(e) of the ProspectusDirective (Directive 2003/71/EC) ("Qualified Investors").Relevant Persons choosing to participate in the Placing ("Placees") will be deemed to have read and understood this Appendix in its entirety and to be making any such offer to participate on the terms and conditions, and to be providingthe representations, warranties, acknowledgements and undertakings, contained in this Appendix. In particular each such Placee represents, warrants and acknowledges that it: 1. is a Relevant Person and undertakes that it will acquire, hold, manage or dispose of any Placing Shares that are allocated to it for the purposes of its business; and 2. is purchasing the Placing Shares for its own account or is purchasing the Placing Shares for an account with respect to which it exercises sole investment discretion and that it (and any such account) is outside the United Statesor it is a dealer or other professional fiduciary in the United States acting on a discretionary basis for non-US beneficial owners (other than an estate or trust), in reliance upon Regulation S under the US Securities Act of 1933 (the "Securities Act"); or if it is not outside the United States is a qualified institutional buyer ("QIB") as defined in Rule 144A under the Securities Act and has executed an investment letter in the form provided to it and has deliveredthe same to the Managers. This announcement (including this Appendix) does not constitute an offer to sell or issue or the solicitation of an offer to buy or subscribe for Placing Shares in any jurisdiction including, without limitation, the United Kingdom, the United States, Canada, Australia, Hong Kong or Japan. This announcement and the information contained herein is not for publication or distribution, directly or indirectly, to persons in the United States, Canada, Australia, Japan or in anyjurisdiction in which such publication or distribution is unlawful.The Placing Shares referred to in this announcement have not been and will not be registered under the Securities Act and may not be offered, sold or transferred within the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act. Any offering to be made in the United States will be made to a limited number of QIBs pursuant to an exemption from registration under the Securities Act in atransaction not involving any public offering. The Placing Shares are being offered and sold outside the United States in accordance with Regulation S under the Securities Act. The Placing Shares have not been approved or disapproved by the US Securities and Exchange Commission, any state securities commission in the United States or other regulatory authority in the United States, nor have any of the foregoing authorities passed upon or endorsed the merits of the Placing or the accuracy or adequacy of this announcement. Any representation to the contrary is a criminal offence in the United States. The distribution of this announcement and the Placing and/or issue of the Placing Shares in certain jurisdictions may berestricted by law. No action has been taken by the Company or the Managers that would permit an offer of such Placing Shares or possession or distribution of this announcement or any other offering or publicity material relating to such Placing Shares in any jurisdiction where action for that purpose is required. Persons to whose attention this announcement is drawn are required by the Company and the Managers to inform themselves about and to observe any such restrictions.In this Appendix, unless the context otherwise requires, the "Company" means Standard Chartered PLC and "Placee" includes a person (including individuals, funds or others) on whose behalf a commitment to acquire Placing Shares has been given. Details of the Placing Agreement and the Placing SharesThe Managers have entered into a placing agreement dated 29 September 2006 (the "Placing Agreement") with the Company whereby each of the Managers has, on the terms and subject to the satisfaction of certain conditions set out therein, undertaken severally, and not jointly or jointly and severally, to use its reasonable endeavours as agent of the Companyto seek to procure Placees for the Placing Shares.The Placing Shares will, when issued, be credited as fully paid and will rank pari passu in all respects with the existing issued ordinary shares of USD0.50 per share in the capital of the Company, including the right to receive all dividends and other distributions declared, made or paid in respect of such ordinary shares after the date of issue of the Placing Shares, save they will not rank for the interim dividend of USD0.2083 per share in respect of the six monthsended 30 June 2006 declared on 8 August 2006 and payable on 11 October 2006.Application for listing and admission to tradingApplication will be made to the Financial Services Authority for admission of the Placing Shares to the Official List ofthe UK Listing Authority (the "Official List"), to the London Stock Exchange for admission to trading of the Placing Shares on the London Stock Exchange's market for listed securities (together "UK Admission") and to the Hong Kong Stock Exchange for the approval of the Placing Shares and permission to deal in the Placing Shares on the Hong Kong Stock Exchange ("HKSE Admission"). It is expected that UK Admission will take place at 8.00 a.m. on 4 October 2006 and that dealings in the Placing Shares on the London Stock Exchange's market for listed securities will commence at that time. It is expected that HKSE Admission will take place at 9.30 a.m. on or around 5 October 2006. During any time interval between UK Admission and HKSE Admission, the respective total tradeable shares in the Company will differ by the amount of the Placing Shares, with the Placing Shares not being tradeable in Hong Kong during this interval unless they are validly transferred to the Hong Kong register of the Company.BookbuildCommencing today each of the Managers will be conducting an accelerated bookbuilding process (the "Bookbuilding Process") to determine demand for participation in the Placing by the Placees. This Appendix gives details of the terms and conditions of, and the mechanics of participation in, the Placing. No commissions will be paid to Placees or by Placees in respect of any Placing Shares.Participation in the Bookbuilding ProcessBy participating in the Bookbuilding Process and the Placing, Placees will be deemed to have read and understood this announcement in its entirety and to be participating and making an offer for Placing Shares on the terms and conditions,and to be providing the representations, warranties, acknowledgements and undertakings, contained in this Appendix.Persons who are eligible to participate in the Placing should communicate their bid by telephone to their usual sales contact at either of the Managers. The Company will make a further announcement following the close of the Bookbuilding Process detailing the price at which the Placing Shares have been placed (the "Pricing Announcement"). Each of the Managers is arranging the Placing severally, and not jointly or jointly and severally, as an agent of the Company.The timing of the closing of the books, pricing and allocations is at the discretion of the Managers and the Company. Details of the placing price will be announced as soon as practicable after the close of the bookbuilding exercise. The Managers and the Company may, at their sole discretion, accept bids that are received after the Bookbuilding Process hasclosed.A bid in the Bookbuilding Process will be made on the terms and conditions in this Appendix and will not be capable of variation or revocation after the close of the Bookbuilding Process.To the fullest extent permissible by law, neither of the Managers nor any of its holding companies, subsidiaries, branches, affiliates or associated undertakings or any subsidiary, branch, affiliate or associated undertaking of any such holding company (each an "Affiliate") shall have any liability to Placees (or to any other person whether acting onbehalf of a Placee or otherwise). In particular, neither the Managers nor any of their Affiliates shall have any liability in respect of its conduct of the Bookbuilding Process or of such alternative method of effecting the Placing as the Managers may determine.Each of the Managers and its Affiliates is entitled to participate as principal in the Bookbuilding Process.The Bookbuilding Process will establish a single price (the "Placing Price") payable to the Managers by all Placees. Anydiscount to the market price of the ordinary shares of the Company will be determined in accordance with the Listing Rules as published by the Financial Services Authority pursuant to Part IV of FSMA, and the guidelines supported by the Association of British Insurers and National Association of Pension Funds.Each Placee's allocation and the Placing Price will be confirmed to Placees orally by the relevant Manager following theclose of the Bookbuilding Process, and a conditional advice note will be dispatched as soon as possible thereafter. The relevant Manager's oral confirmation to such Placee will constitute a legally binding commitment upon such Placee to acquire the number of Placing Shares allocated to it at the Placing Price on the terms and conditions set out in this Appendix and in accordance with the Company's Memorandum and Articles of Association.Each Placee will have an immediate, separate, irrevocable and binding obligation, owed to the relevant Manager, to pay to it (or as it may direct) in cleared funds an amount equal to the product of the Placing Price and the amount of Placing Shares such Placee has agreed to acquire.All obligations under the Placing will be subject to the fulfilment of the conditions referred to below under "Conditions of the Placing". Conditions of the PlacingThe Placing is conditional upon the Placing Agreement becoming unconditional and not having been terminated in accordance with its terms.Each Manager's obligations under the Placing Agreement are conditional on, inter alia:1. the execution of the Terms of Sale (as defined in the Placing Agreement) by each of the Managers and the Company and the publication of the Pricing Announcement through a Regulatory Information Service by no later than 8.00 a.m. (London time) on 2 October 2006 (or by such later time and/or date as the Company and the Managers, may agree) and in a newspaper in Hong Kong pursuant to the HK Listing Rules no later than 3 October 2006 (or such later time and/or date as the Company and the Managers may agree);2. UK Admission occurring no later than 8.00 a.m. (London time) on 4 October 2006 or such later time and/or dateas the Managers may determine;3. at the time of UK Admission, there being no indication that the Listing Committee of the Hong Kong Stock Exchange will not grant listing of and permission to deal in the Placing Shares;4. the warranties given by the Company in the Placing Agreement being true and accurate and not misleading;5. to the extent material in the context of the Placing, the fulfilment by the Company of its obligations under the Placing Agreement; and6. the tender offer for the capital of Hsinchu by the Company's subsidiary, Standard Chartered Bank, having beenmade and not having lapsed, terminated or been withdrawn and no event having occurred at any time prior to UK Admission which gives Standard Chartered Bank the right to withdraw or not to proceed with the tender offer (save to the extent that the Managers have consented to Standard Chartered Bank not exercising any such right).If the conditions above are not satisfied or waived in accordance with the Placing Agreement within the stated time periods (or such later time and/or date as the Company and the Managers may agree) the Placing will lapse and the Placee's rights and obligations shall cease and terminate at such time and each Placee agrees that no claim can be made by or on behalf of the Placee (or any person on whose behalf the placee is acting) in respect thereof.The Managers may, in their absolute discretion and upon such terms as they think fit, waive compliance or extend the time and/or date for fulfilment by the Company with the whole or any part of any of the Company's obligations in relation to certain of the conditions in the Placing Agreement. The Managers reserve the right to waive or to extend thetime and/or date for fulfilment of the relevant conditions in the Placing Agreement. Any such extension or waiver will not affect Placees' commitments as set out in this Appendix.Neither the Company nor any Manager shall have any liability to any Placee (or to any other person whether acting on behalf of a Placee or otherwise) in respect of any decision any of them may make as to whether or not to waive or to extend the time and/or date for the satisfaction of any condition to the Placing nor for any decision any of them may make as to the satisfaction of any condition or in respect of the Placing generally.By participating in the Placing each Placee agrees with each of the Managers that the exercise by the Company or the Managers of any right of termination or any other right or other discretion under the Placing Agreement shall be within the absolute discretion of the Company and the Managers(as the case may be) and that neither the Company nor the Managers need make any reference to such Placee and that neither the Company nor the Managers shall have any liability to such Placee (or to any other person whether acting on behalf of a Placee or otherwise) whatsoever in connection with any such exercise.By participating in the Placing, each Placee agrees that its rights and obligations terminate only in the circumstances described above and will not be capable of rescission or termination by it after oral confirmation by the relevant Manager following the close of the Bookbuilding Process.No ProspectusNo prospectus or other offering document has been or will be submitted to be approved by the UK Listing Authority or TheStock Exchange of Hong Kong Limited or filed with the Registrar of Companies in Hong Kong in relation to the Placing, and Placees' commitments will be made solely on the basis of the information contained in this announcement (including this Appendix). Each Placee, by participating in the Placing, confirms that it has neither received nor relied on any information, representation, warranty or statement made by or on behalf of any of the Managers or the Company other thanthe content of this announcement (including this Appendix) and neither the Managers nor the Company nor any person acting on such person's behalf nor any of their Affiliates has or shall have any liability for any Placee's decision to participate in the Placing based on any other information, representation, warranty or statement including (but not limited to) any publicly available or filed information. Each Placee acknowledges, agrees and warrants that it has relied on its own investigation of the business, financial or other position of the Company in deciding to participate in the Placing. Nothing in this paragraph shall exclude the liability of any person for fraudulent misrepresentation.Registration and SettlementSettlement of transactions in the Placing Shares following UK Admission will take place within the CREST system. The Managers and the Company reserve the right to require settlement for and delivery of the Placing Shares to Placees by such other means that they deem necessary if delivery or settlement is not practicable within the CREST system within the timetable set out in this announcement and Appendix or would not be consistent with the regulatory requirements in any Placee's jurisdiction.Each Placee allocated Placing Shares in the Placing will be sent a conditional advice note stating the number of PlacingShares allocated to it, the Placing Price and the aggregate amount owed by such Placee to the relevant Manager. In agreeing to acquire the allocation of Placing Shares set out in the conditional advice note, such Placee agrees that it will do all things necessary to ensure that delivery and payment is completed in accordance with either the standing CREST instructions or the certificated settlement instructions which it has in place with the relevant Manager.If Placing Shares are to be delivered to a custodian or settlement agent, Placees should ensure that the conditional advice note is copied and delivered immediately to the relevant person within that organisation.Settlement through CREST will be on a T+3 basis unless otherwise notified by the relevant Manager.Interest is chargeable daily on payments not received from Placees on the due date in accordance with the arrangements set out above at the rate of 5 percentage points above prevailing LIBOR as determined by the Managers.Each Placee is deemed to agree that if it does not comply with these obligations, the relevant Manager may sell any or all of the Placing Shares allocated to it on such Placee's behalf and retain from the proceeds, for such Manager's own account and benefit, an amount equal to the aggregate amount owed by the Placee plus any interest due. The relevant Placee will, however, remain liable for any shortfall below the aggregate amount owed by it and may be required to bear any stamp duty or stamp duty reserve tax (together with any interest or penalties) which may arise upon the sale of suchPlacing Shares on such Placee's behalf.Representations and WarrantiesBy participating in the Placing each prospective Placee (and any person acting on such Placee's behalf) unless otherwiseagreed by the Managers and the Company:1. represents and warrants that it has read this announcement (including this Appendix) in its entirety;2. represents and warrants that it has not received a prospectus or other offering document in connection with the placing of the Placing Shares and acknowledges that no prospectus or other offering document has been prepared in connection with the placing of the Placing Shares;3. acknowledges that the content of this announcement is exclusively the responsibility of the Company and that neither the Managers nor any person acting on their behalf has or shall have any liability for any information or representation relating to the Company. Each Placee further represents, warrants and agrees that, except as otherwise provided in paragraph 9 below, the only information on which it is entitled to rely and on which such Placee has relied in committing itself to acquire the Placing Shares is contained in this announcement, such information being all that itdeems necessary to make an investment decision in respect of the Placing Shares;4. represents and warrants that it has neither received nor relied on any other information, representation, warranty or statement made by either of the Managers or the Company and neither the Managers nor the Company will be liable for any Placee's decision to accept this invitation to participate in the Placing based on any other information,representation, warranty or statement. Each Placee further acknowledges and agrees that it has relied on its own investigation of the business, financial or other position of the Company in deciding to participate in the Placing;5. represents and warrants that it, or the beneficial owner, as applicable, is entitled to subscribe for and/or purchase Placing Shares under the laws of all relevant jurisdictions which apply to it, or the beneficial owner, as applicable, and that it has fully observed such laws and obtained all such governmental and other guarantees and other consents in either case which may be required thereunder and complied with all necessary formalities;6. represents and warrants that it has the power and authority to carry on the activities in which it is engaged, to acquire the Placing Shares and to execute and deliver all documents necessary for such acquisition;7. represents and warrants that it is, or at the time the Placing Shares are acquired it will be, the beneficialowner of such Placing Shares, and that the beneficial owner of such Placing Shares is not a resident of Australia, Canada or Japan;8. acknowledges that the Placing Shares have not been and will not be registered in the United States under the Securities Act or under the securities laws of any of the states of the United States or under the securities legislation of Australia, Canada or Japan and, subject to certain exceptions, may not be offered, sold, taken up, renounced or delivered or transferred, directly or indirectly, within those jurisdictions;9. if the Placing Shares were offered to it in the United States, represents and warrants that in making its investment decision, (i) it has relied on its own examination of the Company and the terms of the Placing, including themerits and risks involved, (ii) it may not rely and has not relied on any investigation that the Managers or any of their respective affiliates or any person acting on their respective behalf may have conducted with respect to the Placing Shares or the Placing, (iii) it has made its own assessment of the Company, the Placing Shares and the terms of the Placing based on such information as is publicly available, (iv) none of the Managers, their respective affiliates or the Company has made any representation to it, express or implied, with respect to the Company, the Placing or the Placing Shares or the accuracy, completeness or adequacy of such information that is publicly available, (v) it has consulted its own independent advisors or otherwise has satisfied itself concerning, without limitation, the effects of United States federal, state and local income tax laws and foreign tax laws generally and the US Employee Retirement Income Security Act of 1974, the US Investment Company Act of 1940 and the Securities Act, (vi) it has received all information that it believes is necessary or appropriate in order to make an investment decision in respect of the Company and the Placing Shares and (vii) it is aware and understands that an investment in the Placing Shares involves aconsiderable degree of risk and no U.S. federal or state or non-U.S. agency has made any finding or determination as to the fairness for investment or any recommendation or endorsement of the Placing Shares;10. represents and warrants that it is either (i) a QIB, or the beneficial owner of the Placing Shares is a QIB, and it or the beneficial owner has duly executed an investment letter in the form provided to it by any of the Managers,or (ii) is purchasing the Placing Shares in an 'offshore transaction' in accordance with Rule 903 or Rule 904 of Regulation S under the Securities Act, and has such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of an investment in the Placing Shares, is able to bear the economic risk of an investment in the Placing Shares, is able to sustain a complete loss of the investment in the Placing Shares and has no need for liquidity with respect to its investment in the Placing Shares and represents and, in the case of (i) above,warrants that it is subscribing for the Placing Shares for its own account or for one or more accounts as to each of which it exercises sole investment discretion and each of which is a QIB, for investment purposes and not with a view toany distribution or for resale in connection with, the distribution thereof in whole or in part, in the United States;11. acknowledges that the Placing Shares offered and sold in the United States are "restricted securities" within the meaning of Rule 144(a)(3) under the Securities Act and represents and warrants that, so long as the Placing Shares are 'restricted securities', it will not deposit the Placing Shares into any unrestricted depositary receipt facility inthe United States established or maintained by any depositary bank in respect of the Company's ordinary shares and will only transfer the Placing Shares in accordance with paragraph 12 below;12. acknowledges that the Placing Shares have not been and will not be registered under the Securities Act or withany State or other jurisdiction of the United States, nor approved or disapproved by the US Securities and Exchange Commission, any state securities commission in the United States or any other United States regulatory authority, and agrees that for so long as the Placing Shares are 'restricted securities' it will not reoffer, resell, pledge or otherwise transfer the Placing Shares except (i) outside the United States in offshore transactions in accordance with Rule 903 or 904 of Regulation S under the Securities Act, (ii) in a transaction not involving any general solicitation or general advertising pursuant to Rule 144A or Rule 144 (if available) or (iii) pursuant to an effective registration statement under the Securities Act, and in any case in compliance with all applicable laws;13. acknowledges that where it is acquiring the Placing Shares for one or more managed accounts, it represents andwarrants that it is authorised in writing by each managed account (i) to acquire the Placing Shares for each managed account, and (ii) to execute and deliver an investment letter in the form provided to it by any of the Managers on behalf of each managed account. Each Placee agrees to indemnify and hold the Company and the Managers harmless from any and all costs, claims, liabilities and expenses (including legal fees and expenses) arising out of or in connection withany breach of the representations and warranties in this paragraph 13. Each Placee agrees that the provisions of this paragraph 13 shall survive the resale of the Placing Shares by or on behalf of the managed accounts;14. represents and warrants that if it is a pension fund or investment company, its purchase of Placing Shares is in full compliance with applicable laws and regulations;15 understands that the Placing Shares are being issued to it either through CREST or in certificated, definitiveform and acknowledges and agrees that the Placing Shares will, to the extent they are delivered in certificated form, bear a legend to the following effect unless agreed otherwise with the Company: "THIS SECURITY HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933 (THE "SECURITIES ACT"), OR WITH ANY OTHER REGULATORY AUTHORITY OF ANY STATE OR OTHER JURISDICTION OF THE UNITED STATES AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH RULE 904OF REGULATION S UNDER THE SECURITIES ACT, PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT (IF AVAILABLE) OR PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, AND IN EACH CASE IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES. THIS SECURITY MAY NOT BE DEPOSITED INTO ANY UNRESTRICTED DEPOSITARY FACILITY MAINTAINED BY ANY DEPOSITARY BANK UNLESS AND UNTIL SUCH TIME AS THIS SECURITY IS NO LONGER A "RESTRICTED SECURITY" WITHIN THE MEANING OF RULE 144(A)(3) UNDER THE SECURITIES ACT."16. acknowledges that no representation has been made as to the availability of any other exemption under the Securities Act for the reoffer, resale, pledge or transfer of the Placing Shares;17. represents and warrants that the allocation, allotment, issue and delivery to it, or the person specified by it for registration as holder, of Placing Shares will not give rise to a liability under any of sections 67, 70, 93 or 96 of the Finance Act 1986 (depositary receipts and clearance services) and that it is not participating in the Placing as nominee or agent for any person or persons to whom the allocation, allotment, issue or delivery of Placing Shares would give rise to such a liability;18. represents and warrants that it has complied with its obligations in connection with money laundering and terrorist financing under the Proceeds of Crime Act 2002, the Terrorism Act 2000, and the Money Laundering Regulations (2003) (the "Regulations") and, if making payment on behalf of a third party, that satisfactory evidence has been obtained and recorded by it to verify the identity of the third party as required by the Regulations;19. represents and warrants that it and any person acting on its behalf falls within Article 19(5) and/or 49(2) ofthe Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended, and undertakes that it will acquire, hold, manage and (if applicable) dispose of any Placing Shares that are allocated to it for the purposes of its business only;20. represents and warrants that it has not offered or sold and will not offer or sell any Placing Shares to persons in the United Kingdom prior to UK Admission except to persons whose ordinary activities involve them in acquiring, holding, managing or disposing of investments (as principal or agent) for the purposes of their business or otherwise in circumstances which have not resulted and which will not result in an offer to the public in the United Kingdom within the meaning of section 85(1) of FSMA;21. represents and warrants that it has not offered or sold and will not offer or sell any Placing Shares to persons in the European Economic Area prior to UK Admission except to persons whose ordinary activities involve them in acquiring, holding, managing or disposing of investments (as principal or agent) for the purposes of their business or otherwise in circumstances which have not resulted and which will not result in an offer to the public in any member state of the European Economic Area within the meaning of the Prospectus Directive (which means Directive 2003/71/EC andincludes any relevant implementing measure in any member state);22. represents and warrants that it is a qualified investor as defined in section 86(7) of FSMA, being a person falling within Article 2.1(e)(i), (ii) or (iii) of the Prospectus Directive;23. represents and warrants, if it is a Placee in Hong Kong, that it is a "Professional Investor" as defined in the Securities and Futures Ordinance (Cap. 571) of Hong Kong and any rules made under that ordinance;24. represents and warrants that it, or the beneficial owner, as applicable, is independent of, and is not connected with, the Company, any director or the chief executive of the Company, a substantial shareholder of the Company, or any of their respective associates (as defined in the Rules Governing the Listing of Securities on the Hong Kong Stock Exchange); and that it, or the beneficial owner, as applicable, is not acting in concert (as defined in the Hong Kong Code on Takeovers and Mergers) with the Company, any director or the chief executive of the Company, a substantial shareholder of the Company or any of its subsidiaries, or any of their respective associates (as defined in the Rules Governing the Listing of Securities on the Hong Kong Stock Exchange); and the Placee, or the beneficial owner,as applicable, has not offered or sold and will not offer to sell any Placing Shares to a director or chief executive ofthe Company, a substantial shareholder of the Company or any of its subsidiaries, or any respective associates (as defined in the Rules Governing the Listing of Securities on the Hong Kong Stock Exchange);25. acknowledges that this announcement has not been and will not be registered as a prospectus with the Monetary Authority of Singapore. Accordingly, the Placee represents and warrants that this announcement and any other document ormaterial in connection with the offer or sale, or invitation for subscription or purchase, of the Placing Shares has notbeen and will not be circulated or distributed, and will not offer or sell the Placing Shares or cause the Placing Shares to be made the subject of an invitation for subscription or purchase, whether directly or indirectly, to persons in Singapore other than under circumstances in which such offer, sale or invitation does not constitute an offer or sale, or invitation for subscription or purchase, of the Placing Shares to the public in Singapore;26. represents and warrants that it has only communicated or caused to be communicated and will only communicate or cause to be communicated any invitation or inducement to engage in investment activity (within the meaning of section21 of FSMA) relating to the Placing Shares in circumstances in which section 21(1) of FSMA does not require approval of the communication by an authorised person;27. represents and warrants that it has complied and will comply with all applicable provisions of FSMA with respect to anything done by it in relation to the Placing Shares in, from or otherwise involving the United Kingdom;28. represents and warrants that it and any person acting on its behalf is entitled to acquire the Placing Shares under the laws of all relevant jurisdictions and that it has all necessary capacity and has obtained all necessary consents and authorities to enable it to commit to this participation and to perform its obligations in relation thereto(including, without limitation, in the case of any person on whose behalf it is acting, all necessary consents and authorities to agree to the terms set out or referred to in this announcement) and will honour such obligations;29. undertakes that it (and any person acting on its behalf) will make payment for the Placing Shares allocated toit in accordance with this announcement (including this Appendix) and the conditional advice note on the due time and date set out therein, failing which the relevant Placing Shares may be placed with other persons or sold at such price as the Managers may in their sole discretion determine and without liability to such Placee and it will remain liable for any shortfall below the net proceeds of such sale and the placing proceeds of such Placing Shares and may be required to bear any stamp duty for stamp duty reserve tax (together with any interest or penalties due pursuant to the terms set out or referred to in this Announcement) which may arise upon the sale of such Placee's Placing Shares on its behalf;30. acknowledges that participation in the Placing is on the basis that it is not and will not be a client of any of the Managers and that none of the Managers has duties or responsibilities to it for providing the protections afforded to their clients or for providing advice in relation to the Placing nor in respect of any representations, warranties, undertakings or indemnities contained in the Placing Agreement nor for the exercise or performance of any ofsuch Manager's rights and obligations thereunder including any rights to waive or vary any conditions;31. undertakes that the person whom it specifies for registration as holder of the Placing Shares will be (i) itself or (ii) its nominee, as the case may be. None of the Managers nor the Company will be responsible for any liability to stamp duty or stamp duty reserve tax resulting from a failure to observe this requirement. Each Placee and any person acting on behalf of such Placee agrees to participate in the Placing and it agrees to indemnify the Company and each of the Managers in respect of the same on the basis that the Placing Shares will be credited to the CREST stockaccount of Apollo Nominees Limited as nominee for the Placees who will hold them as nominee on behalf of such Placee until settlement in accordance with its standing settlement instructions;32. acknowledges that any agreements entered into by it pursuant to these terms and conditions shall be governed by and construed in accordance with the laws of England and it submits (on behalf of itself and on behalf of any Placee on whose behalf it is acting) to the exclusive jurisdiction of the English courts as regards any claim, dispute or matter arising out of any such contract, except that enforcement proceedings in respect of the obligation to make payment for the Placing Shares (together with any interest chargeable thereon) may be taken by the Company or any of theManagers in any jurisdiction in which the relevant Placee is incorporated or in which any of its securities have a quotation on a recognised stock exchange;33. acknowledges that each of the Managers may (at their absolute discretion) satisfy their obligations to procurePlacees by themselves agreeing to become a Placee in respect of some or all of the Placing Shares or by nominating any connected or associated person to do so;34. agrees that the Company, the Managers and others will rely upon the truth and accuracy of the foregoing representations, warranties, acknowledgements and undertakings which are given to each of the Managers on its own behalfand on behalf of the Company and are irrevocable; and35. agrees to indemnify and hold the Company and each of the Managers harmless from any and all costs, claims, liabilities and expenses (including legal fees and expenses) arising out of or in connection with any breach of the representations, warranties, acknowledgements, agreements and undertakings in this Appendix and further agrees that the provisions of this Appendix shall survive after completion of the Placing.No UK stamp duty or stamp duty reserve tax should be payable to the extent that the Placing Shares are issued into CRESTto, or to the nominee of, a Placee who holds those shares beneficially (and not as agent or nominee for any other person) within the CREST system and registered in the name of such Placee or such Placee's nominee.Any arrangements to issue or transfer the Placing Shares into a depositary receipts system or a clearance service or to hold the Placing Shares as agent or nominee of a person to whom a depositary receipt may be issued or who will hold the Placing Shares in a clearance service, or any arrangements subsequently to transfer the Placing Shares, may give rise toUK stamp duty and/or stamp duty reserve tax, for which neither the Company nor any of the Managers will be responsible and the Placee to whom (or on behalf of whom, or in respect of the person for whom it is participating in the Placing asan agent or nominee) the allocation, allotment, issue or delivery of Placing Shares has given rise to such UK stamp dutyor stamp duty reserve tax undertakes to pay such UK stamp duty or stamp duty reserve tax forthwith and to indemnify on an after-tax basis and to hold harmless the Company and the Managers in the event that any of the Company and/or the Managers has incurred any such liability to UK stamp duty or stamp duty reserve tax.Stamp, registration, documentary, transfer and similar taxes or duties payable outside the UK will be the responsibilityof the relevant Placee and the Placee, or the Placee's nominee, in respect of whom (or in respect of the person for whomit is participating in the Placing as an agent or nominee) the allocation, allotment, issue or delivery of Placing Shares has given rise to such non-UK stamp, registration, documentary, transfer or similar taxes or duties undertakes topay such taxes and duties forthwith and to indemnify on an after-tax basis and to hold harmless the Company and the Managers in the event that any of the Company and/or the Managers has incurred any such liability to such taxes or duties.This announcement has been issued by the Company and is the sole responsibility of the Company.Morgan Stanley, UBS, Goldman Sachs and Cazenove are each acting exclusively for the Company and no-one else in connection with the Placing and the acquisition. None of Morgan Stanley, UBS, Goldman Sachs or Cazenove will be responsible to anyone other than the Company for providing the protections afforded to their respective clients nor for providing advice in relation to the Placing, the acquisition or any other matter referred to in this announcement.When a Placee or person acting on behalf of the Placee is dealing with either of the Managers, any money held in an account with either Manager on behalf of the Placee and/or any person acting on behalf of the Placee will not be treatedas client money (within the meaning of the rules and regulations of the Financial Services Authority made under FSMA) which, therefore, will not require the Managers to segregate such money, as that money will be held by them under a banking relationship and not as a trustee.All times and dates in this announcement may be subject to amendment. The Managers shall notify the Placees and any person acting on behalf of the Placees of any changes. -------------------------- (1) Standard Chartered estimates (2) Standard Chartered estimates This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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