Taishin Financial plans NT$35bn share disposal

Taishin Financial Holdings Co (台新金控), Taiwan's second-biggest credit-card issuer, said it plans to sell as much as NT$35 billion (US$1.04 billion) of stock to help fund an increased stake in Chang Hwa Commercial Bank (彰化銀行).

The company will offer about 1.75 billion common and preferred shares at NT$20 each in a private placement, it said in a statement. Taishin bought 22 percent of Chang Hwa in July for NT$36.6 billion, gaining management control and creating the second-largest banking group in Taiwan by assets.

"The proceeds will be used to finance future purchases of more Chang Hwa shares, pay back some short-term debt and strengthen Taishin's capital," Taishin's chief financial officer Carol Lai (賴昭吟) said yesterday.

The government owns 18 percent of Chang Hwa. Taishin Financial chairman Thomas Wu (吳東亮) said previously he wanted to absorb Chang Hwa into Taishin. The government has said it favors selling its shares to Taishin.

"We might bring in foreign strategic investors via the issue, although nothing is settled yet. We hope to complete the issue in the first quarter of next year," Lai said.

Nora Hou, an analyst at Nomura Securities Co in Taipei, said there is speculation that Temasek Holdings Pte, an investment arm of Singapore's government, is a potential investor in Taishin.

"The market was worried about Taishin's capital strength after it spent so much on the Chang Hwa acquisition. It seems that now some foreign investors are willing to recapitalize the company. It's definitely good news," Hou said.