SAWT BEIRUT INTERNATIONAL

| 19 June 2024, Wednesday |

Six Hong Kong-listed firms say their deposits at SVB are immaterial

In an effort to reassure investors, six Hong Kong-listed companies, the majority of which are Chinese pharmaceutical companies, reported cash deposits at Silicon Valley Bank on Sunday. They also added that their exposure to the bankrupt U.S. lender and its effects on operations were insignificant.

Startup-focussed The largest bank failure since the 2008 financial crisis occurred on Friday when SVB Financial Group, doing business as Silicon Valley Bank, failed, rocking global markets and leaving investors’ and firms’ money stranded to the tune of billions of dollars.

Among the six companies that published filings to the stock exchange on Sunday, Brii Biosciences Limited had the highest percentage of cash and bank balances at SVB, at less than 9%. It did not provide a monetary figure for the deposits.

“Notwithstanding the closure of SVB, the existing cash and bank balances of the company continue to be sufficient to meet its working capital, capital expenditures and material cash requirements from known contractual obligations for the next three years,” Brii Biosciences said.

 

Broncus Holding Corporation said it held $11.8 million at SVB, representing around 6.5% of its total cash.

“The company’s cash and assets are well-diversified to minimize risk, and it engages sizable financial institutions for commercial banking services which are not currently exposed to liquidity risks,” it said in the filing.

CStone Pharmaceuticals said its accounts held at SVB in excess of the Federal Deposit Insurance Corporation (FDIC)-insured limits are less than $600,000, accounting less than 0.5% of its cash.

Noah Holdings Private Wealth and Asset Management Limited has less than $1 million with SVB, less than 0.2% of its total cash.

Jacobio Pharmaceuticals Group Co had completed the transfer procedure of the entire balance – less than $400,000, which was 0.2% of its total cash – out of SVB in the evening of March 9, the company said.

CANbridge Pharmaceuticals Inc said the amount of cash deposited with SVB is “immaterial and is generally within the amount guaranteed by the FDIC accordingly”, without giving any figures.

Chinese companies are making efforts to pacify local clients as the collapse of the U.S. bank could have a negative psychological impact on China’s markets, since many tech start-ups, especially those with dollar funding, have opened U.S. accounts at SVB.

And that included firms that have no ties with SVB.

Ascentage Pharma Group International said in a filing on Sunday is had not had any business dealings with SVB, while tycoon Pan Shiyi, co-founder and former chairman of commercial property developer SOHO China, said on his Weibo account that he had never opened an account or deposited at the bank.

On Saturday, SVB’s Chinese joint venture with Shanghai Pudong Development Bank also said that it has a sound corporate structure and an independently operated balance sheet, in an apparent effort to pacify local clients.

    Source:
  • Reuters