The future of a leading Hong Kong bank is in doubt after the collapse of $200m investment talks.

Peregrine Investments Holdings Ltd broke off talks with the Swiss financial services company, Zurich Centre, after the bank's shares price fell.

The talks would have made Zurich the largest shareholder in Peregrine, which employs 1,700 people in 15 countries.

In a statement Peregrine said: "The board is currently considering alternatives available to the company."

Peregrine managing director Francis Leung

Last November Zurich agreed to buy $200m of nominal convertible preference shares in Peregrine, making it potentially the largest shareholder in the Asian bank.

On Wednesday Peregrine suspended share trading, saying it was renegotiating the deal due to continued declines in Asian currencies.

The company gave no indication that the Zurich agreement was in jeopardy.

Peregrine shares will remain suspended pending further announcements, it added.

The Hong Kong securities regulator has restricted units of Peregrine from taking on new business, following the collapse of the talks with Zurich.

It said the decision was made to "protect the investing public" and will remain in place pending clarification of the affected Peregrine units.

Zurich spokeswoman Iris Roth said the arrangement had collapsed owing to a fall of the price of shares in Peregrine on the Hong Kong stock market.

She said: "We were unable to agree on the price and also on all of the conditions."
 

Back to top | BBC News Home | BBC Homepage	©