Far Eastern Group (遠東集團) formed a strategic alliance with the Bank of Chongqing (重慶銀行) on Thursday to initiate a 4 billion yuan (US$585.8 million) five-year loan from the Chinese bank to the Taiwanese business group’s subsidiary in Chongqing, China, local newspapers reported yesterday.
Far Eastern chairman Douglas Hsu (徐旭東) inked a strategic alliance agreement in Chongqing with the bank’s president Gan Weimin (甘為民), both of whom vowed to further explore the possibility of banking cooperation, the Chinese-language Economic Daily News said.
FINANCIAL SERVICES
Gan said that the partnership represents his bank’s commitment to provide financial services to the Taiwanese group’s Chongqing-based subsidiaries, including Asia Cement Corp (亞泥), Far Eastern Department Stores Ltd (遠東百貨) and Pacific Sogo Department Store (太平洋崇光百貨).
In return, Far Eastern Group will increase investment in the Chinese city, Hsu was quoted by the report as saying, without providing an exact figure.
After it branches into Shanghai and Beijing, the Bank of Chongqing promises to provide full-range financial services to Far Eastern, the report said, adding that the bank planned to further tap into Taiwanese markets as the first bank from western China in the market after both governments give their blessings through a memorandum of understanding.
The Bank of Chongqing may further sell a stake to the group’s Far Eastern International Bank (遠東商銀), which may also release a stake in itself to the Chinese bank, the report quoted Gan as saying.
SHARE SALES
The Chinese-language Commercial Times yesterday also carried a similar report about cooperation between Far Eastern Group and the Bank of Chongqing. It said Far Eastern Bank may set up a branch in Chongqing and reported its plan to buy a stake in the Chinese lender.
The share sales will be subject to regulatory approvals from both sides, the newspaper said. Gan is slated to visit Taiwan on Monday for a 10-day trip, it said.
Far Eastern Bank, which plans to raise capital of NT$10 billion (US$308 million) through private placements, will talk with and target potential Chinese investors, the reports quoted anonymous bank executives as saying.
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