Eight months since announcing the biggest acquisition deal in the history of Cambodia’s financial sector, Thailand-based Bank of Ayudhya, also known as Krungsri Bank, has yet to receive approval for the landmark deal.

In a statement released in January, Bank of Ayudhya announced its intention to acquire Cambodian microfinance institution (MFI) Hattha Kaksekar Ltd (HKL) – a deal valued at upwards of $140 million. The acquisition, however, hinged on the approval of the National Bank of Cambodia (NBC).

Contacted this week, Chea Serey, general-director of the NBC, declined to comment on whether the central bank had approved the acquisition bid, and instead urged the Post to seek comment from HKL.

Hout Ieng Tong, president and CEO of HKL, said he could not confirm whether the deal would go through, as it had yet to be finalised.

“We still do not have concrete information on the agreement,” Ieng Tong said. “Until now, there is no official agreement.”

Representatives of Bank of Ayudhya did not respond to requests for interview.

However, Noriaki Goto, CEO of Bank of Ayudhya, said in the announcement in January that the share acquisition in HKL would enable the Thai bank to capture growth opportunities arising from the rapid development in Cambodia’s financial sector. He said Bank of Ayudhya would leverage its technical know-how to take advantage of HKL’s established position in the market.

Hattha Kaksekar is the fourth-largest Cambodian microfinance institution with total outstanding loans at $394 million as of end-June. The MFI’s deposits reached $296 million during the first half of the year.

HKL has announced plans to become a commercial bank, but has not disclosed the timeframe for its graduation.

While the central bank has reportedly been pushing Cambodia’s biggest MFIs to upgrade to commercial bank status through tie-ins with established foreign partners, HKL is not the only MFI struggling to get its approval.

Prasac, Cambodia’s largest MFI in terms of assets, recently saw the bid of its preferred bidder, South Korean lending giant Woori Bank, invalidated by the central bank for undisclosed reasons.

Woori was looking to acquire a 50 per cent stake in Prasac, a deal speculated to be worth about $500 million.

Stephen Higgins, managing partner of investment firm Mekong Strategic Partners, previously told the Post that the NBC appeared to be taking a sensible approach toward large MFIs looking to become commercial banks.

He said Cambodia’s MFI sector was uniquely attractive due to its “strong distribution networks, good governance, and hih return on equity”.