(Finance) – The sale of the French retail business Of HSBC extension a My Money Group, a company owned by Cerberus, is at risk of failure due to the increased amount of capital required after interest rates increase. On June 18, 2021, HSBC signed a Memorandum of Understanding (MoU) with My Money Group, which then turned into a binding framework agreement on November 25, 2021.
The acquirer has now informed HSBC that “the significant and unexpected increase in interest rates in France since the signing of the agreement in 2021, and the related fair value accounting treatment in the acquisition, will significantly increase the amount of capital required at the close of the transaction”.
Unless this issue is resolved, buyer it will not be able to obtain regulatory approval for the transaction. In particular, Buyer has notified us that it believes it will not be able to obtain regulatory approval without changing the terms.
The parties “stand continuing the discussions“, reads a note. If the transaction proceeds, it is still expected that the closing will be delayed