Shin Kong Financial Holding Co (新光金控), parent company of the nation’s third-biggest life insurer, yesterday decided to raise US$375 million via the issuance of Global Depositary Receipts (GDR) — 25 percent more than its earmarked goal to raise US$300 million, despite overseas investors over-subscribing by US$700 million-worth of shares, a company executive said yesterday.
The company’s GDR issuance was priced at NT$11.713 per share, or a 9.9 percent discount from its closing share price of NT$13 per share yesterday, its president Victor Hsu (許澎)said.
Hsu said the company had previously hoped the pricing discount would fall within a 10 percent level.
“The pricing discount is in line with our expectation,” he said over the phone, dismissing media speculation that Shin Kong had hoped for a 5 percent discount.
Hsu said that he believed the valuation of the new shares contributed to the over-subscription among overseas investors, who, however, were highly concerned about the company’s future expansion into the Chinese market.
The company will use the newly-raised capital fund its operation in the next two to three years, he said, rejecting media speculation that the firm needs to inject funds to maintain its statutory risk-based capital (RBC) ratio above 200 percent.
“Our RBC ratio in the first half of this year had far exceeded the 200 percent level,” he said.
The company will likely raise another NT$8 billion in the next two to three years including a cash injection proposal in the second half of this year, pending a board approval, Hsu said.