Taishin Financial to sell stake to Japan's Nomura

Taishin Financial Holdings Co (台新金控), the nation's second-largest credit-card issuer, said yesterday that it will sell a 3.38 percent stake, or NT$4 billion (US$125 million) of securities, to Nomura Holdings Inc in a private placement.

"Our board of directors approved Nomura's investment in us this morning," said Bingo Li, deputy spokesman at Taishin, in a telephone interview.

"We will sign a memorandum of understanding later today [Monday]," Li said.

Nomura will own a 2.05 percent stake in Taishin based on common stock, Japan's largest brokerage said in a statement on its Web site. It added that the stake would increase to 3.38 percent if all preferred shares are converted.

"Taishin will not only get new funds, but also expertise that will help it develop into a regional player," said Charles Chen (陳敏智), who manages the equivalent of US$150 million at JF Asset Management Taiwan in Taipei.

Shares in Taishin rose 6.9 percent, the daily limit, to close at NT$20.90 in Taipei, outstripping the 1.9 percent gain in the TAIEX. Shares in Nomura, Japan's biggest brokerage, rose 1.1 percent to close at ?2,305 (US$19.41) in Tokyo.

On Jan. 23, General Electric Co, the world's second-largest company by market value, agreed to buy up to 24.9 percent of Cosmos Bank (萬泰銀行) and share management in the mid-tier lender.

Taishin said on Jan. 27 it will sell NT$27 billion of securities to Newbridge Asia IV, LP in a private placement, giving the buyout firm a 23.12 percent stake if the investment is fully converted.

The Newbridge Capital LLC fund will buy NT$20 billion in shares and NT$7 billion of convertible bonds from Taishin.

If fully converted, Newbridge's investment will give it a 23.12 percent stake in Taishin Financial Holdings, making it the largest single institutional shareholder.

In a move to strengthen asset quality, Taipei-based Taishin said last Friday that it will make provisions of NT$19.1 billion in its results for last year to cover potential bad loans at its credit-card unit, resulting in a loss of more than NT$3 billion for the year.

In July, Taishin Financial bought 22 percent of Chang Hwa Commercial Bank (彰化銀行) for NT$36.6 billion, gaining management control.

The proceeds of the placement will help fund future purchases of Chang Hwa stock, Taishin's chief financial officer Carol Lai (賴昭吟) said on Dec. 2.