Print

Mail

wiki links

Shin Kong Bank bid to auction building ends unsuccessfully

Shin Kong Bank (新光銀行) -- a subsidiary of Shin Kong Financial Holding Co (新光金控) -- yesterday failed in an auction to sell its 14-story financial building located on Minsheng E Road in Taipei for a floor price of NT$7 billion (US$216.57 million).

Despite some 40 potential buyers having previously expressed an interest in the property, no bidders participated in yesterday's auction, the bank said.

overestimation

Billy Yen (顏炳立), president of auctioneer DTZ Pacific Holdings Ltd, said yesterday that potential bidders had overestimated competition for the deal.

"Bidders were afraid that they would have to hike up prices to close the deal, which has been a too worthy to fail."

Yen previously estimated that the deal's closing price might jump to more than NT$8.5 billion or NT$9 billion, which would immediately guarantee a new buyer with a 3 percent to 4 percent return from existing rentals.

Following yesterday's failed auction, Shin Kong plans to openly negotiate prices with potential buyers, bank executive Chen Chien-cheng (陳建成) said.

talks

Chen said that the bank had started talks with more than 10 potential buyers and expects to complete the building's liquidation by the end of this year at the earliest.

Shin Kong has been forced by a law, which restricts banks from investing in properties worth over 10 percent of their capital, to sell off the lucrative rental building where several multinational companies are headquartered.

Shares of Shin Kong Financial, which climbed to NT$26.65 per share in mid-day trade yesterday, closed lower at NT$25.60, or a 1.3 percent decline from Friday's close.
This story has been viewed 806 times.