Asia Trust and Investment Corp (亞洲信託), one of the four institutions still blacklisted by the nation's financial regulator, plans to complete a restructuring scheme through a share sale to foreign investors to prevent being taken over by the government, the company said yesterday.
"We plan to start the capital restructuring in March, beginning with capital reduction to cut NT$2.07 billion [US$63 million] of current capitalization amounting to NT$4.48 billion [to subsidize the loss]," Asia Trust spokesman Lee Cheng-chung (李政忠) said.
The company could then raise US$2 billion in fresh funds from three or four interested Japanese investors, including a major bank, via a private placement and form a new management team by the end of the second quarter, Lee said.
After completing the capital restructuring, Asia Trust plans to apply for a license to transform itself into a commercial bank and may initiate its second-stage capital expansion by raising another US$2 billion from European investors who could also help the bank explore business opportunities overseas, he added.
"The plan would eventually make Asia Trust 100 percent funded by foreign financial investors," Lee said.
The company's other alternative is to merge with other banks, although the decisive factor would be which option enabled the fastest access to funds, he said.
The nation's financial regulator used a government restructuring fund to take over another three problematic banks within a three-week span last month. The intensive takeover has sparked market concern that the fund of more than NT$50 billion might not be sufficient to handle the remaining blacklisted lenders, which include Asia Trust and Chinfon Bank (
"We are well aware of Asia Trust's self-help plans, and capital restructuring is just one of them," said Jong Huey-jen (鍾慧貞), deputy director-general of the Financial Supervisory Commission's Banking Bureau.
Jong said that the regulator did not care what form banks' bailout approaches took, as long as they could help inject fresh capital in time.
Last month, Taiwan Ratings Corp (中華信評) assigned "twBB+" long-term and "twB" short-term counterparty credit ratings to Asia Trust with a negative outlook on restricted business scope, weak profitability, poor asset quality and poor capitalization.
The outlook may be revised to stable if the company received a significant capital injection, said Taiwan Ratings, a local arm of Standard & Poor's Ratings Services.
The ratings agency yesterday affirmed its "twBBB-" long-term and "twA-3" short-term counterparty credit ratings on Chinfon Bank with a stable outlook.
The stable outlook reflects expectations that the bank's credit profile will remain stable over the medium term given its efforts to tighten risk controls.
The outlook may be revised to positive if Chinfon received a sizeable capital injection and implemented an effective strategy to strengthen its competitiveness and/or profitability, it added.