KEY POINTS:
The future ownership of $3 billion-worth of loans made to New Zealand businesses is up in the air after confirmation emerged yesterday that British Bank Lloyds TSB is buying HBOS - the parent of Halifax and the Bank of Scotland - in a £12 billion ($32.82 billion) bailout.
Late last night NZ time as the British markets opened HBOS was expected to officially announce the buyout which British media said had been brokered with the help of its Government.
But the move has fuelled questions over what might happen to HBOS' Australasian operations, which include loans of around $3 billion by its subsidiary BOS International in New Zealand.
Australian media have speculated in the past couple of weeks that the Commonwealth Bank of Australia or the National Australia Bank would be interested in buying the business arm.
Market commentator Arthur Lim said while it was too early to know what Lloyds TSB would do, precedents set elsewhere showed it was common for a business to downsize after an acquisition.
"When the Bank of Scotland bought ABN Amro it immediately embarked on a sale process."
The Australian business has been on the market for some time but has failed to find a buyer. "By past experience one would expect that will follow through."
A spokesman for HBOS Australia said he could not comment.
"Developments overnight concerning a possible merger between HBOS and Lloyds TSB are matters that are being managed from the UK. HBOS Australia continues business as usual."
BOS International chief executive Jack Dykes also declined to comment on the situation, saying the company did not feel the need to have a media presence. He would not confirm how much money it has in loans to New Zealand businesses.
But in an interview with the Business Herald in December 2006 Auckland-based BOS International associate director Hugh Sykes said the company had $2.7 billion invested in New Zealand.
Its loans include a $35 million prop-up for troubled consumer finance company Geneva as well as a proposed $150 million loan Strategic Finance is banking on as part of its capital restructure plans.
It also has substantial loans to New Zealand property developers including a $151 million loan to the Pegasus Town in Christchurch and loans to Landco - the property development vehicle of the Todd family, New Zealand's richest family - which is developing a massive residential housing project in the Auckland suburb of Mt Wellington.
