Far Eastern

Taiwan’s Far Eastern raises US$135m

Far Eastern International Bank raised $135 million in its first issue of global depositary shares.

Far Eastern International Bank said on Friday it had sold 18.25 million global depositary shares at $7.4 each or NT11.25, raising US$135 million.  

The Taipei headquartered lender planned the share sale in order to improve its tier one capital ratio. Taiwanese financial companies are also using funds to help tap into the growing cross-border flows with mainland China.

Far Eastern also wanted to broaden its international shareholder base, said a person familiar with their plans.

The GDSs will be convertible back into ordinary shares in a few weeks.

GDSs are a way for international investors to buy new shares from Taiwanese companies.

Picky investors

The shares were sold within a range of US$7.40 to US$7.64 per GDS; at an exchange rate of 30.217 that worked out at NT$11.18 to NT$11.54 per ordinary share. The ratio was 20 ordinary shares to one GDS.

The placing was at a 5% to 8% discount to the closing price of the common shares on January 23, reflecting Far Eastern’s small market capitalisation and costs for investors of converting the GDSs into ordinary shares.

Investors have also been very picky in their purchases over recent weeks as secondary markets sagged. Even after shrinking the size of its IPO, Hong Kong Electric priced the sale at the low end of its marketed range. Meanwhile, most convertible bonds have priced at the wide end of guidance, said bankers.

Far Eastern’s ordinary shares were trading 0.40% lower at NT$11.75 by midday on Friday.

The company chose to do an accelerated book build instead of a full roadshow to round up potential investors because the share sale was relatively small and time was short ahead of the Chinese New Year holidays.

Waiting list

Deutsche Bank and UBS were joint global coordinators and joint bookrunners on the deal, First Eastern said in a statement to the Taiwan stock exchange.

Deutsche Bank and UBS launched the deal after the Taiwanese stock market closed on Thursday and had enough orders to cover the sale an hour later.

There were more than 30 investors in the book, the majority of whom were long-only funds, then hedge funds less than 5% of the book were wealth managers.

Also the offshore entity of domestic institutional investors bought into the sale. Domestic Taiwanese investors cannot participate directly in a GDS sale. 

The bank originally planned to sell 16.225 million GDSs (324.5 million common shares), but when those shares were snapped up by investors it exercised an option to enlarge the sale by 3.475 million GDSs (69.5 million common shares) boosting the overall sale size to US$135 million.

¬ Haymarket Media Limited. All rights reserved.

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