First Financial Holding Co (第一金控) said that its board yesterday morning approved a proposal to set the issue price of 800 million new common shares at NT$20.5 per share, implying a nearly 20 percent discount from the company’s closing share price of NT$25.45 on Thursday.
The stock closed 1.77 percent higher at NT$25.9 on the Taiwan Stock Exchange yesterday.
EXPANSION
The state-run financial services provider is expecting to raise NT$16.4 billion (US$568.9 million) in fresh capital through the issuance of new shares, and plans to use the proceeds to inject funds into its subsidiaries and to fund the group’s future expansion plans, First Financial said in a filing yesterday.
The company will inject NT$15 billion into First Commercial Bank (第一銀行) and inject NT$500 million of capital into First Venture Capital Co (第一創投), a separate exchange filing showed.
REPLENISHMENT
Part of the proceeds will also be used to replenish First Financial’s working capital and strengthen its capital structure as required by new international accounting rules, according to the two filings.
The fundraising activity, which has received approval from both the Ministry of Finance and the Financial Supervisory Commission, is expected to be completed by the end of September, First Financial said in a filing.
TAIWAN BUSINESS BANK
Other fundraising activities by state-run financial institutions are in the pipeline for the third quarter.
Taiwan Business Bank (臺灣企銀) announced on July 13 that its board had agreed to issue 500 million new common shares.
While the board has not set the issue price for the new shares, the state-run lender is likely to raise as much as NT$5.7 billion based on yesterday’s closing share price of NT$11.4 in Taipei trading.
Hua Nan Financial Holdings Co (華南金控) is also reportedly planning to raise up to NT$20 billion to help it meet future capital requirements, but the proposal has not yet received the green light from the financial authorities.
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