Wed, Mar 15, 2006 - Page 12 News List

E.Sun partners with Temasek Holdings

By Amber Chung  /  STAFF REPORTER

E.Sun Financial Holding Co (玉山金控) yesterday announced that it was forming a partnership with Singapore-based Temasek Holdings Ltd, selling US$400 million of convertible bonds to Asia Financial Holdings Pte Ltd, Temasek's wholly owned subsidiary.

Asia Financial Holdings -- which will make the investment through its 100 percent-controlled subsidiary Adahlis Holdings BV -- will become E.Sun Financial Holding's largest institutional shareholder, with a 15 percent stake, after the conversion of bonds is completed in 2008, E.Sun Financial's spokesman Tu Wu-lin (杜武林) said.

Asia Financial Holdings will gain one seat on E.Sun Financial's 13-member board in the shareholders meeting in June after converting the bonds into a 5 percent stake at NT$21.21 per share in one month, Tu said.

The Singaporean firm could obtain a total of two to three seats following the conversion of the rest of the bonds at NT$24.36 per share two years from now, he added.

E.Sun Financial will use the proceeds to strengthen its capital adequacy ratio and for potential merger and acquisition (M&A) activities, Tu said.

"We will not give up any M&A opportunities in the future to sustain our development," he said.

He declined to say whether the company was engaged in any merger talks at the moment.

"We are positive about the partnership amid the recent lackluster [performance of the] finance sector," said Vincent Chang (張進森), an analyst at ABN AMRO Asia Ltd Taipei Branch.

Separately, Taishin Financial Holding Co (台新金控) yesterday signed contracts with Newbridge Capital of the US and Nomura Group of Japan, which had agreed to invest a combined NT$31 billion in the local finance group through a private placement last month.

The deal will enable Taishin Financial to strengthen its capital structure and adequacy while building up its leading position in the nation's finance sector, the company said in a statement released yesterday.

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