Pacific Century's Australia holdings to be sold
By Frank Cho
Advertiser Staff Writer
Bank of Hawaii's parent company said yesterday that it has agreed to sell all its holdings in the Bank of Queensland Ltd. as part of a larger plan to divest underperforming assets around the Pacific.
Australian trucking magnate Lindsay Fox is reportedly paying $20 million to acquire 6.2 million shares, or a 10 percent stake, in the Australian bank, according to a spokesman for Fox.
Bank of Hawaii holds 17 percent of the Bank of Queensland.
Monday, Bank of Hawaii's parent, Pacific Century Financial Corp., said it would sell nearly all of its Asian and South Pacific operations to focus its business in Hawai'i.
"This action conforms to our strategic intentions and we intend to redeploy the capital realized from this transaction toward meeting other key objectives," Richard Dahl, president of Bank of Hawaii, said in a statement yesterday.
The deal would be subject to state and federal regulatory approval.
Of Bank of Hawaii's 17 percent stake in the Australian bank — 8 percent of it is held in convertible notes.
Officials with the Bank of Queensland said yesterday that the bank has agreed to buy back the other 5.4 million notes, worth about $15.7 million from Bank of Hawaii.
"It's been very busy for us over the last 48 hours," said David Liddy, the Australian bank's new chief executive. "We are going to continue our strategic alliance (sharing expertise) with the Bank of Hawaii, which is very important to us."
Liddy said he met with the Fox family and they have assured him that they are looking at the bank as a long-term investment.
Liddy said that Bank of Hawaii still has several employees working at the bank in Australia and that he did not know what would happen to those workers.
The two banks have had a strategic alliance since November 1997, sharing products, services, expertise and facilities.
The Bank of Queensland, which is similar in size and operation to a community bank in the United States, has a reputation as a well-managed bank.
It has 95 locations in northeastern Australia and about $2 billion in assets.
Bank of Hawaii first invested $22 million in the Australian bank in 1998 to boost its growing international portfolio.
It invested another $23 million the following year to increase its stake to 17 percent.
The deal gave the Hawai'i bank its first foothold on the Australian continent, while giving Queensland greater access to international markets.
Commonwealth Bank of Australia, the country's second-largest lender, is Bank of Queensland's second biggest shareholder, with 13 percent.
