Cosmos appoints six new directors

Financially troubled Cosmos Bank Taiwan (萬泰銀行) is expected to elect Simon Williams, an executive partner at SAC Private Capital Group LLC, as its new chairman at a board meeting next week, although the US private equity firm's planned capital injection has been delayed to the end of this month.

"The bank's recapitalization is progressing very well ... and we're optimistic that the transaction will be completed by the end of this month," Cosmos' acting chairman and chief managing director Jim Slavik told an extraordinary shareholders' meeting yesterday.

The cash-strapped lender replaced seven of its 13-member board at the meeting. All seven, including Williams, were nominated by SAC. The other six are Frank Baker, Jeffrey Hendren, Peter Berger, Woulter Kolff, David Fite and Cosmos president Hu Chien-chu (胡建助).

The bank retained six incumbent directors -- the two GE Money representatives Slavik and Manoj Naik and four independent directors -- as well as three incumbent supervisors. The new board's term expires in 2010.

The financial regulator said last Thursday that it would sanction any board reshuffle at Cosmos despite "technical complications" that have hindered the completion of the bank's recapitalization plan.

In late August, SAC and GE agreed to purchase nearly 80 percent of Cosmos' shareholding by jointly investing NT$29.7 billion (US$900 million).

Nearly 60 percent of SAC's planned capital injection of US$650 million will come from a local syndicated loan.

To complete the capital injection, Cosmos' 12 bank debtors, including the biggest China Development Financial Holding Corp (中華開發金控) would have to agree to convert their combined NT$13.25 billion debt holdings into Cosmos equities at NT$2 per share, which will translate into a 12 percent shareholding.

However, as of yesterday, Cosmos has yet to receive the signatures of four remaining bondholders after 94 percent of the debt owners had agreed to the debt-equity swap to complete Cosmos' recapitalization plan, Slavik told reporters after the meeting.

"Without their signatures, the transaction deal will not be completed," Slavik said. "But we're confident that we will get their signatures."

The four holdouts are Singfor Life Insurance Co (幸福人壽), Sinon Life Corp (興農人壽), Chunan Credit Cooperative (竹南信合社) and Sanjhih Township Farmers Association (三芝農會).