Chinatrust Financial Holding Co (中國信託金控), which began trading yesterday as the holding company of Taiwan's largest credit-card issuer, may raise as much as US$600 million by selling bonds convertible into stock to finance acquisitions.
The sale may take place in July or August, spokesman Michael Jong (鍾隆吉) said yesterday. The proceeds would be used to acquire rivals, such as TaipeiBank (台北銀行), of which Chinatrust owns 4.9 percent, he said.
"TaipeiBank is very attractive," Jong said. "All of its branches are in Taipei."
Taiwan's financial companies are trying to grow by absorbing rivals to compete with foreign competitors in an increasingly deregulated industry. Chinatrust Commercial Bank (
Investment banks that may manage its bond sale include Morgan Stanley Dean Witter & Co and Goldman Sachs Group Inc, and the bank may appoint a sale manager in one to two weeks, said Steve Chou (
Jong did not identify other banks or financial companies Chinatrust may be eyeing. Chinatrust needs to own at least 25 percent of another company if it wants to absorb it into the holding company. It is currently taking over affiliates Chinatrust Securities Corp (中信銀證券), Chinatrust Insurance Brokers Corp (中信保險經紀人) and Chinatrust Bills Finance Corp (中信票券).
Taiwan financial companies, such as Fubon Financial Holding Co (富邦金控), Cathay Financial Holding Co (國泰金控) and SinoPac Holdings Co (建華金控) are raising funds to expand as the nation rebounds and to lock in cheap funding ahead of an anticipated rise in interest rates this year.
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