Singapore’s Transpac Capital (匯亞資金管理公司) completed NT$5 billion (US$150 million) in merger financing yesterday for Taiwan’s Eastern Home Shopping Network (EHS, 東森得易購).
The syndicated loan is this year’s largest merger financing deal underwritten by Chinatrust Commercial Bank (中國信託商業銀行) and two sub-agents: Taishin International Bank (台新銀行) and Bank SinoPac (永豐銀行).
At a ceremony yesterday, EHS chairman Mary Leong (梁馬利) said Taiwan’s largest TV shopping network planned to use the new funds to help turn the network into a global “shopping wonderland” in Asia.
She also said the network expects to reach a revenue goal of NT$100 billion in four years.
EHS completes 30,000 transactions per day. The network plans next year to contribute NT$1 per transaction to send underprivileged children in Taiwan to colleges abroad and encourages customers to do the same.
Leong said that the network’s estimated total donation pool next year was NT$15 million, which would enable 15 to 20 students to travel overseas.
“Fraught with legal issues and lack of investor enthusiasm, the Transpac/EHS deal almost couldn’t be accomplished,” Chinatrust Financial Holding Co (中信金控) president James Chen (陳佳文) said at a media briefing yesterday. “But the undisputed US$20 million cash injection from husband and wife team Mary and Christopher Leong (梁家鏘), regardless of any prospects of loan approval, showed their commitment to and passion for EHS.”
The loan terms are NT$1.75 billion in revolving lines of credit, with the rest in a six-year loan based on the London Interbank Offering Rate, plus a 2.8 percent spread.
NT$2 billion came from Chinatrust, while SinoPac and Taishin each assumed NT$1.5 billion in liabilities, Chen said. More banks, including overseas institutions, could become involved, he said.
EHS is the nation’s largest TV shopping network in terms of revenue and the number of registered customers.
The network, which has five TV channels and sells merchandise across a wide range of categories, also retails on the Internet, through catalogues and via mobile phones. Its annual revenue for 2006 reached NT$28 billion, but shrank slightly last year to NT$26 billion after the departure of disgraced chairman Gary Wang (王令麟).
EHS figures show a registered customer base of 4 million, a long way ahead of the nation’s second-largest shopping network, Momo Shop, run by Fubon Multimedia Technology Co (富邦媒體科技). Momo registered NT$3.1 billion in revenue for 2006 and NT$7 billion for last year, EHS figures show.
Transpac Capital is one of the oldest and largest private equity investment firms in Asia. Based in Singapore, it has invested in more than 200 companies across Asia, including Eastern Multimedia Corp (東森多媒體科技), Alibaba.com Ltd (阿里巴巴), Foshan Nanhai Zhongnan Aluminum Wheel Co (南海中南鋁合金輪轂) and Bukaka Singtel International.
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