Credit Suisse faces restrictions on business till deal closure
2023.05.16 21:43
© Reuters. FILE PHOTO: A view shows the logo of Credit Suisse on a building near the Hallenstadion in Zurich, Switzerland, April 4, 2023. REUTERS/Pierre Albouy
(Reuters) -Credit Suisse Group AG faces certain restrictions in its ability to do business until its acquisition by rival UBS Group AG (SIX:) is completed, according to a regulatory filing on Tuesday.
In certain cases, without prior UBS approval, Credit Suisse cannot grant a new credit facility or credit line in an amount exceeding 100 million Swiss francs ($113 million) to investment grade borrowers or more than 50 million francs to non-investment grade borrowers, the filing showed.
In addition, Credit Suisse cannot undertake any capital expenditure of more than 10 million francs or enter into certain contracts worth more than 3 million francs per year.
The filing also showed Credit Suisse cannot order any “material amendments” to its employee terms and conditions, including remuneration and pension entitlements, while the merger is underway.
UBS is in the process of integrating its major rival following a government-orchestrated takeover in March.
It said it had set aside $4 billion in provisions for potential litigation and regulatory issues as it prepared to complete the rescue of its Swiss rival.
UBS estimated a “negative goodwill” of $34.8 billion from its acquisition of Credit Suisse.
($1 = 0.8889 Swiss francs)
