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Cash-strapped EnTie agrees on restructuring plan

Shareholders of capital-strapped EnTie Commercial Bank (安泰銀行) yesterday agreed to a plan to raise a maximum of NT$22.5 billion (US$682 million), up from the previously planned NT$12 billion, in a bid to improve its financial structure.

The bank is confident that the first batch of funds worth NT$5 billion, including NT$1 billion via private placement, will be injected into the bank by the end of this month, as required by the regulator, by selling new shares at NT$8 per share, EnTie chairman Paul Chiu (邱正雄) said yesterday.

Another NT$7 billion will be raised by the end of this year to boost the capital adequacy ratio to more than 10 percent from the current 8 percent, while the remainder may arrive afterwards, Chiu added.

The bank is reportedly in talks with several interested foreign investors, including Orix Group of Japan, HSBC Ltd, ABN AMRO Bank, and the latest rumored Carlyle Group. Considering long-term competitiveness enhancement, EnTie prefers partnership with foreign banks, which can offer know-how, to private equity shops that pursue investment return, Chiu said.

All talks are ongoing and "none of them have collapsed yet," Chiu said, adding that 34 out of the bank's 53 outlets nationwide are located in the greater Taipei area, which is appealing to investors.

The bank hopes to complete its recapitalization by the end of this year through private placement, which will see its capitalization rise to NT$42.5 billion from the current NT$20 billion. The increased portion can be equivalent to an over 58 percent stake in the bank if the bank sells shares at no lower than NT$8.
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