Japan’s Bank of Tokyo Mitsubishi has issued a statement today clarifying that it has not made a decision on any European asset acquisitions, following a flurry of media reports yesterday alleging it was poised to acquire Royal Bank of Scotland’s (RBS) project finance portfolio.
The Japanese bank’s brief statement notes that “recently certain media carried reports about asset acquisitions by MUFG [Bank of Tokyo Mitsubishi] in Europe and certain other areas. There has been, however, no decision made in this respect”.
RBS: £4 billion project
Some reports said the transaction is weeks away from being concluded with others suggesting an end of year/ beginning of 2011 deadline. A source from the UK project finance community suggested any delays to completion of the deal might stem from the UK government’s desire to receive assurances from MUFG that it will continue to lend to UK infrastructure, post-acquisition.
RBS was one of the leading global project finance lenders before the downturn, but it slimmed down its project finance lending activities dramatically after the Crisis hit, focusing instead on advisory. It has several high-profile loans on its books, including loans to the M25 motorway project finance initiative (PFI), one of 2009’s biggest deals.
The purchase of RBS’ project finance portfolio would allow MUFG to gain a strong foothold in the European infrastructure market and significantly increase its footprint in the global project finance market. According to data from Reuters, RBS is currently advising on $9.64 billion of projects this year, placing it at number 5 in the news agency’s project finance rating. MUFG, in contrast, stands at number 24.
The deal would also allow MUFG to counter slow performance in Japan, where bank lending has been falling for most of the last year.