Ta Chong Bank (大眾銀行), the nation's fifth-biggest cash card issuer by lending balance, yesterday said its board approved cash injection plans by Carlyle Group and private equity fund Corsair Capital LLC through a private placement.
The board agreed to issue convertible financial debentures, common shares and preferred shares worth NT$21.5 billion (US$650 million) to the new investors in a bid to improve its financial structure, Chuang Ya-ping (莊雅評), a senior manager at the bank, said by phone.
The board reviewed the fundraising plans at a special meeting on Wednesday and posted its conclusions in separate filings to the Taiwan Stock Exchange that night.
"If the regulatory review process and the subscription of new securities go as smoothly as expected, we expect to obtain NT$15.5 billion of new funds by Oct. 31," Chuang said yesterday.
The bank is scheduled to hold an extraordinary shareholder meeting on Oct. 31 to approve the private placement
"The remaining NT$6 billion is likely to come in sometime in November ... but definitely before the end of December," he said.
Ta Chong will use the new capital to enhance its capital adequacy ratio, the BIS ratio that measures a bank's financial strength, to 14 percent if provisions for allowances and reserves are excluded, Chuang said.
The bank reported a BIS ratio of 8.96 percent as at the end of April.
Ta Chong shares gained NT$0.2, or 1.9 percent, to close at NT$10.7 on the Taiwan Stock Exchange yesterday. The stock has shed 4.89 percent since the beginning of this year.
The bank last week reported NT$634.3 million in sales for last month and NT$6.57 billion in revenues in the first eight months of the year, a drop of 40.58 percent and 22.70 percent from the same period of last year respectively.
On July 10, Ta Chong announced that a consortium led by the Carlyle Group would invest NT$21.5 billion for a stake of almost 37 percent in the local lender, marking the US private equity fund's first entry into the nation's banking sector.
As individual investors are limited by law to a maximum share of 25 percent of the total amount of a bank's issued shares with voting rights, the Carlyle Group had been looking for other interested buyout firms to jointly invest in Ta Chong.
Chuang said Carlyle and Corsair would jointly own a stake of between 36 percent and 40 percent in the bank at NT$17 per share, a price that represents a premium of almost 59 percent on yesterday's closing price.
Corsair is expected to inject NT$7 billion, while Carlyle would invest NT$14.5 billion. The two new investors are expected to secure seven of the 13 board seats, including two independent directors, he said.
"This is not a deal of changed ownership ... like that of Cosmos Bank (萬泰銀行), but a deal of strategic partnership as the new investors will bring to us the needed know-how to boost our business," Chuang said.
On Monday, cash-strapped Cosmos said its board had given the go-ahead to ink agreements with units of US private equity firm SAC Private Capital Group LLC and General Electric Co (GE) to sell an 80 percent stake for NT$29.7 billion.
To comply with local regulations, Carlyle will establish a financial services company, Zhong Xi (眾希), in Taiwan. Zhong Xi will subscribe for 304.3 million common shares, 121.7 million preference shares and convertible financial debentures worth NT$3.9 billion issued by Ta Chong.
Corsair, meanwhile, will set up a local subsidiary called Xiong He (雄賀), through which it plans to subscribe for 284 million common shares, 113.6 million preference shares and NT$3.6 billion worth of convertible debentures.
The Carlyle Group, not Ta Chong, will submit the investment plans to the Financial Supervisory Commission, Chuang said.
"We cannot comment on whether the financial regulator will give the green light to the investment plans or when it will do so. But we see no particular reason why the financial regulator would oppose the investment plans," he said.
In Italy’s storied gold-making hubs, jewelers are reworking their designs to trim gold content as they race to blunt the effect of record prices and appeal to shoppers watching their budgets. Gold prices hit a record high on Thursday, surging near US$5,600 an ounce, more than double a year ago as geopolitical concerns and jitters over trade pushed investors toward the safe-haven asset. The rally is putting undue pressure on small artisans as they face mounting demands from customers, including international brands, to produce cheaper items, from signature pieces to wedding rings, according to interviews with four independent jewelers in Italy’s main
Japanese Prime Minister Sanae Takaichi has talked up the benefits of a weaker yen in a campaign speech, adopting a tone at odds with her finance ministry, which has refused to rule out any options to counter excessive foreign exchange volatility. Takaichi later softened her stance, saying she did not have a preference for the yen’s direction. “People say the weak yen is bad right now, but for export industries, it’s a major opportunity,” Takaichi said on Saturday at a rally for Liberal Democratic Party candidate Daishiro Yamagiwa in Kanagawa Prefecture ahead of a snap election on Sunday. “Whether it’s selling food or
CONCERNS: Tech companies investing in AI businesses that purchase their products have raised questions among investors that they are artificially propping up demand Nvidia Corp chief executive officer Jensen Huang (黃仁勳) on Saturday said that the company would be participating in OpenAI’s latest funding round, describing it as potentially “the largest investment we’ve ever made.” “We will invest a great deal of money,” Huang told reporters while visiting Taipei. “I believe in OpenAI. The work that they do is incredible. They’re one of the most consequential companies of our time.” Huang did not say exactly how much Nvidia might contribute, but described the investment as “huge.” “Let Sam announce how much he’s going to raise — it’s for him to decide,” Huang said, referring to OpenAI
Nvidia Corp’s negotiations to invest as much as US$100 billion in OpenAI have broken down, the Wall Street Journal (WSJ) reported, exposing a potential rift between two of the most powerful companies in the artificial intelligence (AI) industry. The discussions stalled after some inside Nvidia expressed concerns about the transaction, the WSJ reported, citing unidentified people familiar with the deliberations. OpenAI makes the popular chatbot ChatGPT, while Nvidia dominates the market for AI processors that help develop such software. The companies announced the agreement in September last year, saying at the time that they had signed a letter of intent for a strategic
RSS