Ruen Chen Investment Holding Co (潤成投資), which won the bid to buy American International Group’s (AIG) local life insurance unit, yesterday received approvals from the shareholders of its parent companies to proceed with the US$2.16 billion acquisition.
However, the company did not announce plans for a capital increase to support the acquisition as widely expected.
Supermarket operator Ruentex Development Co (潤泰新), cement and chemical fiber maker Ruentex Industries Ltd (潤泰全) and shoemaker Pou Chen Corp (寶成工業), owners of Ruen Chen Investment, held separate shareholder meetings in Taipei and Changhua County to approve the purchase plan.
The three companies own 25 percent, 23 percent and 20 percent respectively of Ruen Chen Investment, which in January won the bid for AIG’s 97.57 percent stake in Nan Shan Life Insurance Co (南山人壽).
Ruentex Group chairman Samuel Yin (尹衍樑) holds the remaining shares in the investment firm.
The share transfer proposal is currently under review by the Financial Supervisory Commission (FSC). Last August, the commission rejected another buyer’s acquisition proposal amid concern over its long-term commitment and ability to raise capital.
Ruentex Development chairman Davis Liu (劉忠賢) said he was confident about winning regulatory approval, for which the group must also pledge to safeguard the rights of about 40,000 employees and 4 million policyholders as well as follow rules governing capital sources.
Liu declined to comment on the capital issue except to say that the consortium would take necessary steps when required to do so.
Media reports said the group would need a massive capital injection given its current net worth and cash position, but that the commission has limited syndicated loans to 50 percent of the bid value.
Ruentex Development and Ruentex Industries did not unveil new plans to raise capital, as some media reports had speculated, after raising their capital to NT$15 billion (US$505 million) and capping non-operating investment at 1.5 times of total shareholders’ equity in December.
Pou Chen shareholders yesterday agreed to lift the company’s non-operating investment to 40 percent of its net worth, from 30 percent of paid-in capital, in addition to approving the acquisition of Nan Shan.
The move is intended to give the company more financial flexibility to meet future needs, the footwear maker said.
The consortium filed an application for share transfer on Feb. 6, and the commission asked for more supporting documents on Feb. 17.
Wu Chung-chuan (吳崇權), the deputy director-general of the commission’s Insurance Bureau, said the FSC would wrap up the review within two months after the consortium has submitted all documents.
The group has yet to respond to the request for more information, Wu said.
Wu added that the commission does not impose a 50 percent limit on loans as some media reports have said.
However, Liu Teng-cheng (劉燈城), chairman of the state-run Taiwan Cooperative Bank (合作金庫銀行), which is organizing the syndicated loan for the acquisition, said the loan should not exceed 50 percent of the transaction amount. He did not elaborate.
BUSINESS UPDATE: The iPhone assembler said operations outlook is expected to show quarter-on-quarter and year-on-year growth for the second quarter Hon Hai Precision Industry Co (鴻海精密) yesterday reported strong growth in sales last month, potentially raising expectations for iPhone sales while artificial intelligence (AI)-related business booms. The company, which assembles the majority of Apple Inc’s smartphones, reported a 19.03 percent rise in monthly sales to NT$510.9 billion (US$15.78 billion), from NT$429.22 billion in the same period last year. On a monthly basis, sales rose 14.16 percent, it said. The company in a statement said that last month’s revenue was a record-breaking April performance. Hon Hai, known also as Foxconn Technology Group (富士康科技集團), assembles most iPhones, but the company is diversifying its business to
Apple Inc has been developing a homegrown chip to run artificial intelligence (AI) tools in data centers, although it is unclear if the semiconductor would ever be deployed, the Wall Street Journal reported on Monday. The effort would build on Apple’s previous efforts to make in-house chips, which run in its iPhones, Macs and other devices, according to the Journal, which cited unidentified people familiar with the matter. The server project is code-named ACDC (Apple Chips in Data Center) within the company, aiming to utilize Apple’s expertise in chip design for the company’s server infrastructure, the newspaper said. While this initiative has been
Clambering hand-over-hand, sweat dripping into his eyes, a durian laborer expertly slices a cumbersome fruit from a tree before tossing it down to land with a soft thump in his colleague’s waiting arms about 15m below. Among Thailand’s most famous and lucrative exports, the pungent “king of fruits” is as distinctive in its smell as its spiky green-brown carapace, and has been farmed in the kingdom for hundreds of years. However, a vicious heat wave engulfing Southeast Asia has resulted in smaller yields and spiraling costs, with growers and sellers increasingly panicked as global warming damages the industry. “This year is a crisis,”
HIGH-TECH: As leading-edge process technologies become more complicated, only a handful of players are able to provide design services, the company’s CEO said Artificial intelligence (AI) chip designer Alchip Technologies Ltd (世芯) yesterday said that revenue would grow significantly again in 2026 after adding a major AI chip customer, reversing moderation amid a product transition next year. The Taipei-based application-specific IC (ASIC) designer reiterated its strong revenue growth forecast for this year and 2026 after its stock plummeted about 23 percent to NT$3,145 from a peak of NT$4,085 on March 6 amid growing competition. Alchip said it has built strong partnerships with cloud service providers (CSP), denying that it had lost orders to smaller competitors such as Faraday Technology Corp (智原). Faraday said it has secured