China Development Financial Holding Corp (中華開發金控) is posed to tap into the emerging corporate restructuring market by establishing a credit-finance subsidiary in the near future upon the completion of related legislation.
China Development, the nation's fifth-largest financial company in terms of market value, is seeking partnerships with multinational companies to co-fund the credit-finance subsidiary, company spokeswoman Grace Fang (方鳳山) said yesterday.
Fang said China Development is interested in taking up lucrative commercial opportunities in the turnaround market by injecting fresh capital into companies, which are currently under-performing yet worthwhile investments in the long term.
Fang said that China Development's risk-control assessment team, which constitutes several Wall Street-trained professional financial consultants, has complied credit ratings for all the nation's listed companies, with the intention of targeting undercapitalized companies with good credit ratings for investment.
There are approximately 50 such companies listed, a Chinese-language newspaper reported Tuesday, citing Chao Yuan-chi (趙元旗), president of China Development.
China Development has long expressed interest in the nation's maturing buy-out and corporate restructuring markets.
In early December, Benny Hu (胡定吾), chairman of subsidiary China Development Industrial Bank (中華開發工銀), had said that the bank estimated that the local buy-out market's size may reach NT$450 billion.
To tap into the buy-out market, Hu said his bank plans to invest NT$1 billion and partner with the US' Morgan Stanley and Japan's Mizuho Corporate Advisory Co to establish a US$300 million buy-out fund to take a sizeable stake in the market in the near future.
But Fang yesterday said that Chao's plan differs from Hu's fund-raising plan.
Nevertheless, pundits yesterday welcomed either of the company's plans.
"I look forward to local players' participation in the market," said Sherry Lin (林秀玲), who chairs the enterprise evaluation committee under the Turnaround Management Association of Taiwan (TMAT).
Lin said that she hopes to strike chances of cooperation with China Development, which may play the role of "potential investor" to the association's turnaround projects, adding that "there may be more than 50 to-be-restructured companies" in the market.
Sharing a similar view, Taiwan Securities Co (台証證券) president Lin Keh-hsiao (林克孝) said that the turnaround market in Taiwan is under-developed that requires not only capital but also expertise and experience.
Lin Keh-hsiao further lauded China Development's talent pool, past experience in investment banking businesses and expertise in business management will lay a solid groundwork to its future performance in the market.
Both Lins are key figures in successfully turning around the restructured Tong Lung Metal Industry Co (東隆五金) -- formerly a debt-ridden family-run locksmith.
HSBC Private Equity (Asia) Ltd director Vincent Chen (
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