Tue, Oct 17, 2006 - Page 12 News List

Bowa Bank's plan to recapitalize draws three foreign bidders

By Jackie Lin  /  STAFF REPORTER

Shares of financially stricken Bowa Bank (寶華銀行), a small bank controlled by the Nice Group (耐斯), surged yesterday on the news that the bank's recapitalization plan had attracted three foreign buyers.

Bowa's stock closed up 6.6 percent at NT$2.43 on the GRETAI Securities Market, outperforming the TAIEX's 1.05 percent gain.

As part of its third-stage financial structure improvement program, last month the bank's board of directors approved raising NT$4 billion (US$120.4 million) through a private placement. The value of each share was temporarily set at NT$4.

The bank, with capital of NT$10.17 billion, expected to gain endorsement for its recapitalization plan during an extraordinary shareholders' meeting on Nov. 3, Shieh I-peng (謝一鵬), a spokesman for Bowa Bank, said yesterday in a telephone interview.

The capital will be used to strengthen the bank's financial health and boost its capital adequacy ratio, he said.

According to a report by the Chinese-language Economic Daily News yesterday, the bank has been approached by three bidders from Europe and Japan.

The report added that the potential buyers might include Japan's Shinsei Bank Ltd, but the overseas banks that have set up branches in Taiwan -- such as HSBC or ABN AMRO Bank -- have not entered the bidding.

Shieh refused to confirm the report about bidders for the placement and would not elaborate on which firms had contacted the bank for further discussions.

Last month, Bowa Bank's board also approved its merger with Asia Trust (亞洲信託) via a share swap.

According to its filing to the Taiwan Stock Exchange, 2.23 shares of Asia Trust would be exchanged for one share of Bowa.

The merger will become effective Dec. 31, when Bowa, the surviving entity, will assume Asia Trust's assets, liabilities and ongoing legal issues.

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