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Carlyle Group biggest holder in Ta Chong Bank

The Carlyle Group yesterday became the biggest shareholder of Ta Chong Bank (大眾銀行), securing seven out of 13 seats on the board of directors.

The Kaohsiung-based bank held an extraordinary shareholders meeting to approve a NT$21.5 billion (US$663 million) joint cash injection by the US private equity fund's local investment arm and a financial service provider under private equity fund Corsair Capital LLC.

Carlyle planned to control 25 percent of Ta Chong, while Corsair was expected to take a 12 percent stake, Ta Chong said in a filing to the Taiwan Stock Exchange on Tuesday, which detailed the structure of the private placement.

If Carlyle converts all its convertible preferred shares and convertible debentures in the future, it would command a 27.7 percent stake in the bank, leaving Corsair with a 9.3 percent stake.

Carlyle was supposed to complete the fund injection of NT$15.5 billion yesterday, but postponed it until the end of this month. The US buyout firm is expected to pay the remaining NT$6 billion at the end of this month as well.

Two of the seven seats Carlyle secured are independent directors. Chairman Chen Tien-mao's (陳田錨) family got three seats, while another three seats went to the Ko family, which runs Kwang Yang Motor Co (光陽工業), the nation's largest motorcycle manufacturer, company spokesman James Chiou (邱正光) said by telephone.

While management will remain in the hands of the current team, Chen said he would retire and hand his position over to his son, Chen Chien-ping (陳建平).

Chen Chien-ping was later elected by the board as the new chairman.

Carlyle representative Gregory Zeluck was elected as vice chairman, the Ta Chong filing said.

Ta Chong posted a net loss of NT$310 million, or NT$0.15 per share, for the first three quarters yesterday, compared with a net loss of NT$3.96 billion, or NT$2.18 per share, in the same period last year.
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