CTBC Financial Holding Co (中信金控) yesterday said it would acquire a 35.6 percent stake in Thailand’s LH Financial Group PLC for NT$15.4 billion (US$471.02 million).
The companies have signed a legally binding memorandum of understanding following a year of negotiations, CTBC Financial said.
CTBC Financial is to acquire 7.55 billion newly issued shares through a private placement and it is to become the Thai company’s largest shareholder at about 2.2 baht per share, at a price-to-book value (PB) ratio of 1.67.
“The price of the stake acquisition is reasonable and comparable to the range of between 1.45 and 1.98 PB ratio seen in a number of acquisitions of Thai financial companies by other international players, such as Mitsubishi UFJ Financial Group’s acquisition of the Bank of Ayudhya PLC in 2013,” CTBC Financial president Daniel Wu (吳一揆) told an investors’ conference in Taipei.
There are few viable acquisition targets in Thailand, and the Thai government imposes stringent controls on the country’s financial sector, Wu said, adding that the country’s political situation did not affect its decision to buy shares in LH Financial Group.
Wu said that upon the deal’s completion and following the commencement of joint operations, LH Financial would expand the number of directors on the board from nine to 11, of which five seats are to be occupied by CTBC Financial representatives.
CTBC Financial senior vice president Rachael Kao (高麗雪) said that following the acquisition, the company’s capital adequacy ratio is expected to decline 8.8 percentage points to 133.3 percent, based on figures as of the end of December last year.
As the deal is conducted by CTBC Financial’s banking unit, CTBC Bank Co Ltd (中國信託銀行), the bank’s capital adequacy ratio is to drop by 0.35 percentage points to 10.67 percent, with Tier 1 ratio falling 0.7 percentage points to 12.28 percent, Kao said.
Wu yesterday reiterated that CTBC Financial does not have plans to raise capital. The firm last month canceled plans to raise NT$15.46 billion by issuing 920 million new shares at NT$16.8 per share.
LH Financial has a banking unit, a fund and a securities unit, and its net income last year was 1.65 billion baht (US$46.55 million).
Meanwhile, CTBC Financial yesterday acquired a NT$1.2 billion portfolio of corporate loans from ANZ Bank (Taiwan) Ltd, as part of its expansions plans focused on asset acquisition.
This week’s undoing of the TerraUSD algorithmic stablecoin and its sister token, Luna, has ramifications for all of crypto. First, there is the immediate impact: The rapid collapse of a once-popular pair of cryptocurrencies sent a ripple effect across the industry, contributing to plummeting coin prices that wiped hundreds of billions of market value from the digital-asset market and stoked worries over the potential fragility of digital-asset ventures. Then there are the knock-on effects. In addition to delivering punishing losses to individual users and investment firms, the spectacular failure of a market darling like Terra threatens to have a cooling effect
China’s biggest chipmaker has cut its outlook for the second quarter, joining a growing list of manufacturers warning about the fallout from lockdowns aimed at containing the country’s worst COVID-19 outbreak in two years. Semiconductor Manufacturing International Co (SMIC, 中芯) estimates a month-long lockdown in Shanghai could spur component shortages and logistics tangles, and erase about 5 percent of its output in the second quarter. “We are trying our best to mitigate the impact on product delivery,” SMIC Chairman Gao Yonggang (高永崗) told analysts on a call yesterday morning. “We are still assessing the actual impact as many suppliers restart their
Formosa Plastics Corp (台灣塑膠), the flagship entity of Formosa Plastics Group (台塑集團), yesterday said that it would build a new manufacturing site in Texas at a cost of US$207 million. When completed, the plant would have an annual capacity of 100,000 tonnes of alpha olefins, which are used to make high-density polyethylene (HDPE), among other products, the company said. About 63,000 tonnes would be used by Formosa Plastics, while the remaining 37,000 tonnes would be sold on the international market, it said. The projected completion date of the plant is October 2025, and mass production is scheduled for December that year after a
DISRUPTIONS: The war in Ukraine, China’s lockdown measures, rising interest rates and inflation have thrown a wrench into business plans made years in advance Samsung Electronics Co is talking with foundry clients about charging as much as 20 percent more for making semiconductors this year, joining an industry-wide push to hike prices to cover rising costs of materials and logistics. Contract-based chip prices are likely to rise around 15 percent to 20 percent, depending upon the level of sophistication, people familiar with the matter said. Chips produced on legacy nodes would face bigger price hikes, while new pricing would be applied from the second half of this year, they said, adding that Samsung has finished negotiating with some clients and is in discussions with others. Samsung’s decision