Lone Star Fund III LP of the US and China Development Asset Management Co (
Lone Star will probably take a stake of as much as 70 percent and the unit of China Development Industrial Bank (中華開發銀行), Taiwan's biggest lender by market value, the rest in a company that will buy the bad loans at a discount, said Xie Wei-jin, president of China Development Asset Management.
On some loans "we'll try and get the debtors to pay and some we may re-package and sell to others," Xie said.
Lone Star officials didn't return calls seeking comment.
Taiwan's banks are grappling with rising loan defaults as the nation enters its worst recession on record, with analysts saying the economy will probably shrink 2.6 percent this year.
Taiwan, where bad loans are defined as those on which no interest has been paid for three months or principal for six months, said more than 11 percent of bank lending was non-performing or in trouble at the end of September.
Private-sector estimates are as much as two times higher.
"Our government is forcing banks to write off non-performing loans quickly and to make their financial information more transparent," said Chang Ming-daw, director of the division of domestic banking at the Bureau of Monetary Affairs, part of the Ministry of
Finance.
Chang said the nation's banks have written off NT$114 billion of bad loans in the first nine months of this year, compared with NT$163 billion last year.
Lone Star is the latest foreign company seeking a Taiwan counterpart to buy bad loans.
Earlier this month, Lehman Brothers Holdings Inc and Hua Nan Commercial Bank (華南銀行) said they will each take a 50 percent stake in a company that will buy NT$10 billion (US$290 million) of bad loans from Taiwan's second-biggest publicly traded lender by assets.
In August, Lend Lease Corp, Australia's largest property developer, and Taishin International Bank said they'll set up a venture to buy and manage bad loans held by Taiwan banks and finance companies.
Xie said China Development and Lone Star plan to set up a property company that will buy non-performing loans and a service company that will manage the loans.
"We haven't finalized" the details of the agreement, Xie said.
The partnership will be non-exclusive, allowing China Development Asset Management to seek similar agreements with other foreign companies.
China Development Industrial Bank had earlier been in talks with Morgan Stanley Dean Witter & Co to set up a company to buy non-performing loans from Taiwanese financial institutions.
Xie said the bank is still talking to Morgan Stanley.
Goldman Sachs Group Inc and Chinatrust Commercial Bank (
Two US House of Representatives committees yesterday condemned China’s attempt to orchestrate a crash involving Vice President Hsiao Bi-khim’s (蕭美琴) car when she visited the Czech Republic last year as vice president-elect. Czech local media in March last year reported that a Chinese diplomat had run a red light while following Hsiao’s car from the airport, and Czech intelligence last week told local media that Chinese diplomats and agents had also planned to stage a demonstrative car collision. Hsiao on Saturday shared a Reuters news report on the incident through her account on social media platform X and wrote: “I
STILL ON THE TABLE: The government is not precluding advanced nuclear power generation if it is proven safer and the nuclear waste issue is solved, the premier said Taiwan is willing to be in step with the world by considering new methods of nuclear energy generation and to discuss alternative approaches to provide more stable power generation and help support industries, Premier Cho Jung-tai (卓榮泰) said yesterday. The government would continue to develop diverse and green energy solutions, which include considering advances in nuclear energy generation, he added. Cho’s remarks echoed President William Lai’s (賴清德) comments in an interview last month, saying the government is not precluding “advanced and newer nuclear power generation” if it is proven to be safer and the issue of nuclear waste is resolved. Lai’s comment had
‘BUILDING PARTNERSHIPS’: The US military’s aim is to continue to make any potential Chinese invasion more difficult than it already is, US General Ronald Clark said The likelihood of China invading Taiwan without contest is “very, very small” because the Taiwan Strait is under constant surveillance by multiple countries, a US general has said. General Ronald Clark, commanding officer of US Army Pacific (USARPAC), the US Army’s largest service component command, made the remarks during a dialogue hosted on Friday by Washington-based think tank the Center for Strategic and International Studies. Asked by the event host what the Chinese military has learned from its US counterpart over the years, Clark said that the first lesson is that the skill and will of US service members are “unmatched.” The second
STANDING TOGETHER: Amid China’s increasingly aggressive activities, nations must join forces in detecting and dealing with incursions, a Taiwanese official said Two senior Philippine officials and one former official yesterday attended the Taiwan International Ocean Forum in Taipei, the first high-level visit since the Philippines in April lifted a ban on such travel to Taiwan. The Ocean Affairs Council hosted the two-day event at the National Taiwan University Hospital International Convention Center. Philippine Navy spokesman Rear Admiral Roy Vincent Trinidad, Coast Guard spokesman Grand Commodore Jay Tarriela and former Philippine Presidential Communications Office assistant secretary Michel del Rosario participated in the forum. More than 100 officials, experts and entrepreneurs from 15 nations participated in the forum, which included discussions on countering China’s hybrid warfare
RSS