Shin Kong Financial Holding Co (新光金控) said on Tuesday it had signed a private placement deal with Dai-ichi Mutual Life Insurance Co to sell NT$7.96 billion (US$240.6 million) in equities to the Japanese life insurer.
In a filing with the Taiwan Stock Exchange, Shin Kong Financial said it would sell NT$6.3 billion in common shares to Dai-ichi Mutual Life to boost the Taiwanese firm’s capital.
The filing said Shin Kong Financial would also sell NT$1.65 billion in preferred shares in its subsidiary Shin Kong Life Insurance Co (新光人壽) to Dai-ichi Mutual Life to help strength the local life insurer’s financial structure.
As of the end of September, Shin Kong Financial was the nation’s sixth-largest financial services provider in terms of assets, Financial Supervisory Commission data showed.
The company said in late October that the capital injection from its Japanese shareholder would likely boost Shin Kong Life’s ratio of risk-based capital (RBC) to 250 percent, higher than the regulatory requirement of 200 percent.
RBC is a measurement of an insurer’s or a financial institution’s capital strength.
Upon completion of the deal, Dai-ichi Mutual Life’s shareholding in Shin Kong Financial will increase to 14.9 percent from 5.99 percent, Shin Kong Financial said in October.
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