Union Insurance Co recapitalization plan backed by investors

A provisional shareholder meeting for Union Insurance Co (友聯產險), the nation's third-largest property insurer, yesterday approved a recapitalization proposal to bring in fresh capital from an investment team led by Tsai Yen-ming (蔡衍明), CEO of Want Want Group (旺旺集團).

The insurer is set to reduce its capital by 91.5 percent, or NT$5.37 billion (US$164 million), to NT$500 million.

To meet the legal threshold of NT$2 billion in capital for insurers, Union Insurance also plans to raise funds to a maximum of NT$3.5 billion through private placements.

During an ad hoc board meeting yesterday afternoon, board directors approved the capital from Tsai's team, which will purchase new shares from the insurer at NT$10 each, or NT$1.5 billion in total, acting spokesman Kenny Ching (鄭有利) said during a phone interview.

"Tsai's team will become the insurer's major shareholder, to control 75 percent after chairman [Samuel Yu (喻志鵬)] signs a contract with them," Ching said.

Tsai's investment was a personal decision, not a Want Want investment plan, Ching said.

US-based Newbridge Capital Inc had inked a memorandum of understanding (MOU) with the insurer in January, with plans to invest around US$100 million. But the contract expired on May 23.

Shares of Union Insurance edged up NT$0.2 to close at NT$3.1 on the Taiwanese bourse yesterday.

The names of Union Insurance's new investors were announced after the stock market closed.