Chinatrust Financial Holdings Co (中信金控) said yesterday that it won’t consider selling its shares to China Strategic Holdings Ltd (中策集團) in exchange for a stake in Nan Shan Life Insurance Co (南山人壽) until the Hong Kong-listed company receives regulatory approval to acquire the life insurance firm.
If the Hong Kong consortium’s application falls through, Chinatrust might deal directly with American International Group Inc (AIG) on buying shares in AIG subsidiary Nan Shan, Daniel Wu (吳一揆), president of the financial service provider, told reporters on the sidelines of a shareholders meeting.
Chinatrust signed an memorandum of understanding (MOU) with China Strategic late last year, agreeing to sell about 10 percent of its shares — about 1.17 billion shares worth NT$2.08 billion (US$64.6 million) — to the consortium in exchange for 30 percent of Nan Shan shares worth US$60 billion.
“The MOU between Chinatrust and China Strategic expired last Friday. We will set aside the acquisition plan until China Strategic is granted approval from regulators,” Wu said.
China Strategic could become the second-largest shareholder of Chinatrust, next to the Koo family, if it were able to acquire the 9.9 stake in the nation’s biggest financial service provider.
Wu said that the legislature’s Finance Committee said on May 19 that it hoped a local financial company could have more than 30 percent stake in Nan Shan. Against this backdrop, Chinatrust has yet to give up on acquiring shares in the firm.
Shareholders hope Chinatrust’s plan to issue 2.5 billion shares via a private placement — at NT$16.45 per share, with a total value of NT$41.125 billion — could be completed in the fourth quarter of this year, Wu said.
Meanwhile, a Nan Shan Life Insurance self-help group said it still plans to set up a company over the next two weeks to counter the consortium’s acquisition bid.
Although the group has only raised about NT$1 million of its NT$70 million capital target so far, the plan is moving ahead, said Rex Wang (王世榕), a representative for the group.
“The funding process has not been as smooth as we wanted it to be,” the former Taiwan representative to Switzerland told a press briefing, saying he failed to convince Swiss financial institutions to invest in the venture even though he used his connections to pull a few strings.
The group is holding talks with seven international banks about funding and those from Japan are “possible investors,” he said.
The group plans to establish a new firm capitalized at NT$70 million and then raise another NT$70 billion through the issuance of 7 billion special shares to buy Nan Shan from the Hong Kong consortium and AIG.
“We appeal to the government to drop the case [the consortium’s bid] and not spend any more time evaluating it,” Wang said, claiming the consortium was simply a front for Chinese-backed funding.
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