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Sat, Oct 13, 2001 - Page 18 News List

Koos Group looks to create financial holding company

ASSET LEVERAGING One of the nation's richest families is considering combining the financial elements of the Koos Group to enhance its ability to make acquisitions


Koos Group (和信集團), owned by one of Taiwan's richest families and with interests in businesses ranging from cement to telecommunications, may reorganize its financial units into a holding company as it seeks acquisitions.

Chinatrust Commercial Bank (中國信託銀行) and KGI Securities Co Ltd (中信證券) may be brought under one corporate entity, said Angelo Koo, a member of the family. His unit KGI Securities is on the lookout for acquisitions, Koo said.

"The Koos Group is keen on exploring the possibility" of a financial holding company, he said in an interview. "Obviously we see value in putting all the parts together." A holding company will allow the entities to make further acquisitions under one umbrella and cross-sell products.

Reorganizing financial units into a holding company may also help promote discipline among Koos Group units, some investors said, as Taiwan's slumping economy hurts even rich families like the Koos.

In June, Amvescap Plc, Europe's biggest publicly traded fund manager, bought 70 percent of the Koos' Grand Pacific Securities Investment Trust Co (中信證券投信) for about NT$80.5 million, helping to partly cover borrowings at the Taiwan Cement Corp (台泥), which has about NT$1.5 billion of debt.

The Taiwanese economy shrank 2.35 percent in the second-quarter and Albert King, president of HSBC Investment Management Taiwan Ltd, forecast the economy may contract as much as 8 percent in the third quarter.

"These family groups have been leveraging their assets, they are facing difficulties," said King, who helps manage about NT$2.5 billion in investments.

Koos Group has NT$36 billion in assets, about 20,000 employees around the world and a controlling interest in at least 80 companies.

If the Koos Group does merge its financial units into one company, it will be the latest Taiwanese company to announce plans to do so ahead of the November enactment of a new law allowing the formation of holding companies that can acquire lenders, securities companies, insurers and money managers.

KGI Securities, which has units in Hong Kong, China, Korea, Thailand, and the Philippines, is looking to acquire other brokerages. KGI is in talks with Singapore's J.M. Sassoon Holdings Ltd to help expand its broker, asset management, investment banking and proprietary trading businesses.

"We are looking not just in Taiwan but throughout the region" for potential acquisitions, Koo said.

He said KGI was looking to expand its relationship with Deutsche Bank AG, whose asset management unit signed a joint venture with the Koos Group in August to offer investment services.

"We have plans to work closer together to initiate other business in the region," Koo said. KGI Securities was formerly known as China Securities Co Ltd.

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