Fri, Nov 30, 2007 - Page 12 News List

Cosmos capital injection delayed until next month

EQUITY INVESTMENT The FSC dismissed concerns that the government may have to take over should the capital injection fail to make it to the deadline

By Joyce Huang  /  STAFF REPORTER

A planned capital injection of NT$29.7 billion (US$900 million) by US private equity firm SAC Private Capital Group LLC and General Electric Co (GE) to take up a major stake at financially troubled Cosmos Bank (萬泰銀行) will be delayed until the end of next month, the financial regulator said yesterday.

Technical complications had slowed the capital injection, but Financial Supervisory Commission vice chairwoman Susan Chang (張秀蓮) said that "the private equity firms' capital should come in before the end of December."

Both firms were originally scheduled to inject the full capital by next Wednesday when Cosmos convenes an extraordinary shareholders' meeting.

But the planned capital injection has been delayed by the Ministry of Economic Affairs' review process concerning the transfer of shares resulting from the deal, Chang said.

She dismissed concerns that the government may have to take over Cosmos should the capital injection fail to arrive before the regulator's final deadline.

Cosmos' board meeting and shareholder meeting, respectively in early September and late last month, agreed to sell a combined 80 percent controlling stake to SAC and GE Money -- the consumer lending unit of GE -- for US$650 million and US$250 million respectively.

SAC PEI Taiwan Holdings LLC has agreed to buy 1.65 billion preferred shares of Cosmos at NT$2 each, as well as NT$18.15 billion in convertible financial debentures, the bank said.

GE Capital Taiwan Holdings Inc has also agreed to buy 3.3 billion new common shares of the Taipei-based Cosmos Bank at NT$2 each and NT$1.65 billion in convertible financial debentures.

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