Financially troubled Cosmos Bank (
SAC PEI Taiwan Holdings LLC agreed to buy 1.65 billion preferred shares of Cosmos at NT$2 each, as well as NT$18.15 billion in convertible financial debentures, the bank said in a filing to the Taiwan Stock Exchange.
GE Capital Taiwan Holdings Inc also agreed to buy 3.3 billion new common shares of the Taipei-based Cosmos Bank at NT$2 each and NT$1.65 billion in convertible financial debentures.
The announcement followed a memorandum of understanding (MOU) signed on Aug. 31 in which the bank agreed to sell a combined 80 percent controlling stake to SAC and GE Money, the consumer lending unit of GE, for US$650 million and US$250 million respectively.
The deal is pending approval at a Cosmos shareholder meeting scheduled for Oct. 29.
The Financial Supervisory Commission said it hoped the investment would be concluded by the end of this month, as the money-losing Cosmos Bank urgently needs fresh capital injection to improve its financial structure.
But completion of the capital injection, which is due to close by the end of this year, hinges on whether Cosmos' major creditors would agree to convert their debt holdings into the lender's equities, as new investors are hoping to see a lower debt burden before assuming control.
Yesterday's outcome came after Cosmos' 11 creditors gave their preliminary approval to restructuring NT$13.25 billion in the bank's debt, including exchanging the debt into Cosmos Bank shares.
Last Friday, the bank signed the MOU with China Development Industrial Bank (
The other seven creditors announced yesterday included the insurance unit of the Bank of Taiwan (臺灣銀行), Singfor Life Insurance Co (幸福人壽), Allianz Taiwan Life Insurance Co (安聯人壽), Sinon Life Insurance Co (興農人壽), Mingtai Fire and Marine Insurance Co (明台產物保險), South China Insurance Co (華南產險) and the Sanjhih Township Farmers Association (三芝鄉農會).
Cosmos shares plunged by close to the 7 percent daily limit yesterday in Taipei to NT$3.57.
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