Chang Hwa outlines plan

Chang Hwa Commercial Bank (彰化銀行), the nation's sixth-largest bank by assets, said yesterday that it will follow through with a plan to sell a 22 percent stake by the end of the year.

The share sale will be conducted either by private buy-out or through public auction in a bid to engage potential strategic partners in management, an official said yesterday.

"We welcome all interested local financial holding companies [to form a strategic alliance] by the end of this year," the bank's vice president Hsieh Chao-nan (謝昭南) said yesterday.

Earlier this month, Chang Hwa failed to sell 1.4 billion new shares through a global depositary receipt (GDR) issuance to potential foreign investors, due to overly low offers from the interested bidders.

The bidders reportedly included Japan's Shinsei Bank Ltd and a consortium formed by US Lone Star Funds that included the Carlyle Group Ltd and Dutch ING Groep NV.

Chang Hwa said that it plans to find one strategic partner through the private release of a 22 percent stake to local or foreign investors at a selling price of over NT$14 per share. The buyer will not be allowed to sell the newly acquired shares within the next three years.

If the private release fails to work, the bank will turn to a public issuance of 1.4 billion shares, priced at NT$10 per share, to raise capital. In doing so, the lender will be able to add another NT$14 billion into its paid-in capital of NT$49.6 billion currently, Hsieh said.

Shareholders approved expansion of the bank's paid-in capital to some NT$65 billion at a meeting in 2003.

The qualified partner should be complementary to Chang Hwa, such as strong consumer banking business with a significant number of branches in northern Taiwan, Hsieh said.