Taishin Financial Holding Co Ltd (台新金控) has briefed the Financial Supervisory Commission (FSC) on a tentative plan to sell new shares to raise funds for the acquisition of Prudential Life Insurance Co of Taiwan (保德信人壽).
While the company has yet to formally apply for FSC approval of the share sale plan, the share sale seems to have a few advantages over previous plans, Banking Bureau Chief Secretary Phil Tong (童政彰) told a videoconference on Tuesday.
Since last year, the commission has rejected several fundraising plans proposed by Taishin Financial due to fuzzy feasibility and unclear financial arrangements.
Photo: CNA
Under the new plan, Taishin Financial would issue 800 million class F preferred shares to raise money and let investors decide whether to transfer the preferred stocks to Chang Hwa Commercial Bank Ltd (CHB, 彰銀) common shares from the eighth year of the issuance, Tong said.
The share swap ratio would be one Taishin Financial preferred share to one CHB common share, the plan says.
Taishin Financial’s plan is to be discussed at its annual shareholders’ meeting.
From the 11th year, Taishin Financial could redeem all of the outstanding class F preferred stocks in exchange for CHB common shares, and if CHB’s share price is lower than the issued price of the class F preferred stocks, Taishin would make up the difference in cash, the plan says.
To enable the financial arrangement, Taishin Financial needs to amend its bylaws, which requires the approval of its shareholders, the commission said.
“The new share sale plan has a more specific structure than previous plans, and as the preferred stocks cannot be changed into CHB shares until the eighth year, the share swap would have a smaller impact on the market than an immediate share swap,” Tong said.
However, it is uncertain whether an eight-year arrangement is reasonable and if Taishin Financial could issue new shares to be exchanged for another firm’s shares, he said.
“So far, no firm in Taiwan has conducted such as unique share arrangement,” Tong said.
While the issuance of new preferred stocks would boost Taishin Financial’s capital adequacy, the swapping of shares from the eighth year would reduce its capital adequacy, Tong said.
If the commission approves the new plan, it would demand that the firm strengthen its capital adequacy before the share swap, he said.
How Taishin Financial raises the funds would not be the focus of a bureau review, Insurance Bureau Director-General Shih Chiung-hwa (施瓊華) said.
The bureau is mostly concerned that Taishin Financial has enough capital to support Prudential Life Taiwan after insurers are required to follow stricter solvency rules, she said.
“We don’t care if Taishin Financial directly sells its CHB shares or issues new preferred stocks, but we need to ensure that Taishin Financial has enough money,” Shih said.
Taishin Financial’s share price yesterday gained 0.34 percent to close at NT$14.7, while CHB’s share price rose 1.81 percent to NT$16.9 per share, Taiwan Stock Exchange data showed.
The New Taiwan dollar is on the verge of overtaking the yuan as Asia’s best carry-trade target given its lower risk of interest-rate and currency volatility. A strategy of borrowing the New Taiwan dollar to invest in higher-yielding alternatives has generated the second-highest return over the past month among Asian currencies behind the yuan, based on the Sharpe ratio that measures risk-adjusted relative returns. The New Taiwan dollar may soon replace its Chinese peer as the region’s favored carry trade tool, analysts say, citing Beijing’s efforts to support the yuan that can create wild swings in borrowing costs. In contrast,
Nvidia Corp’s demand for advanced packaging from Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) remains strong though the kind of technology it needs is changing, Nvidia CEO Jensen Huang (黃仁勳) said yesterday, after he was asked whether the company was cutting orders. Nvidia’s most advanced artificial intelligence (AI) chip, Blackwell, consists of multiple chips glued together using a complex chip-on-wafer-on-substrate (CoWoS) advanced packaging technology offered by TSMC, Nvidia’s main contract chipmaker. “As we move into Blackwell, we will use largely CoWoS-L. Of course, we’re still manufacturing Hopper, and Hopper will use CowoS-S. We will also transition the CoWoS-S capacity to CoWos-L,” Huang said
Nvidia Corp CEO Jensen Huang (黃仁勳) is expected to miss the inauguration of US president-elect Donald Trump on Monday, bucking a trend among high-profile US technology leaders. Huang is visiting East Asia this week, as he typically does around the time of the Lunar New Year, a person familiar with the situation said. He has never previously attended a US presidential inauguration, said the person, who asked not to be identified, because the plans have not been announced. That makes Nvidia an exception among the most valuable technology companies, most of which are sending cofounders or CEOs to the event. That includes
INDUSTRY LEADER: TSMC aims to continue outperforming the industry’s growth and makes 2025 another strong growth year, chairman and CEO C.C. Wei says Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), a major chip supplier to Nvidia Corp and Apple Inc, yesterday said it aims to grow revenue by about 25 percent this year, driven by robust demand for artificial intelligence (AI) chips. That means TSMC would continue to outpace the foundry industry’s 10 percent annual growth this year based on the chipmaker’s estimate. The chipmaker expects revenue from AI-related chips to double this year, extending a three-fold increase last year. The growth would quicken over the next five years at a compound annual growth rate of 45 percent, fueled by strong demand for the high-performance computing
RSS