Wed, Apr 12, 2006 - Page 11 News List

Shinkong looking for a world-class strategic partner

By Amber Chung  /  STAFF REPORTER

Shinkong Financial Holding Co (新光金控), the nation's eighth-largest financial services provider by assets, is looking to form a strategic partnership with a world-class financial group that has the cross-border experience and know-how to help it expand overseas, company spokesman Victor Hsu (許澎) said in a phone interview yesterday.

"A large number of foreign financial institutions have expressed interest in establishing a cooperation relationship within the past year," Hsu said.

The strategic partnership will be formed through the issuance of up to NT$7 billion (US$215.74 million) in common shares through a private placement within one year, he said.

This would translate into a 5 percent to 7 percent stake in the financial holding firm, based on a tentatively set price of NT$28 per share, he said.

Shinkong Financial has NT$40.7 billion in capitalization.

The board of directors has designated company chairman Eugene Wu (吳東進) to find a suitable counterpart. The authorization will expire in a year from the date that the fundraising is approved during the shareholders' meeting on June 9, Hsu said.

The company may use the funds for acquisitions, he added.

Last month, Temasek Holdings of Singapore bought a 15 percent stake in E.Sun Financial Holding Co (玉山金控) for US$400 million, while Newbridge Capital of the US and Nomura Group of Japan jointly invested NT$31 billion in Taishin Financial Holding Co (台新金控) in February.

The board of Shinkong Financial yesterday also decided to distribute dividends of NT$1.3 per share, comprising NT$0.65 in cash and the remainder in stock.

The company reported that first-quarter net profit reached NT$7.14 billion, or NT$1.76 per share, the highest among the nation's 14 financial groups. This, despite the fact that its banking arm incurred a net loss of NT$1 billion after setting aside NT$2 billion in provision expenses to cover consumer bad debts.

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