The Investment Commission yesterday approved five foreign investment applications totaling NT$19.4 billion (US$599.12 million), including a NT$18.1 billion (US$558.34 million) investment by Carlyle Group to take control of Eastern Multimedia Co (
According to a statement published on the commission Website, Carlyle is adopting a multi-layer re-investment strategy to gain a majority stake in Eastern Multimedia and 12 of its cable television affiliates.
Carlyle has adopted the strategy because Taiwan prohibits foreign companies from owning more than a 60 percent stake in a cable TV operator, according to the National Communications Commission.
To avoid this investment ceiling ban, the Washington-based equity firm has arranged three British Virgin Islands-registered companies to invest in three Taiwanese companies, respectively. Carlyle will then use these three local firms to re-invest in Eastern Multimedia and its cable television units, the statement said.
Carlyle will also borrow NT$30 billion (US$924.5 million) from more than 10 lenders to fund the acquisition and NT$2 billion (US$61 million) to boost working capital at the cable television operator, Bloomberg reported yesterday, citing bankers involved in the loan.
Eastern Multimedia is the nation's biggest cable television broadcaster and has almost a quarter of the nation's 4.5 million cable subscribers. The purchase by Carlyle received a green light from the Fair Trade Commission last week. It initially failed to gain approval from the National Communications Commission.
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