Taiwan: Cathay Financial to raise funds for insurance arm
Source: Asia Insurance Review | Sep 2019
Cathay Financial Holding is planning a rights issue to raise NT$20bn ($638m) amid a rapidly changing financial market. The rights issue is expected to be completed by mid-December at the earliest.
The funds to be raised will be used to boost investment in the company’s flagship entity Cathay Life Insurance and the banking arm Cathay United Bank, with each receiving NT$10bn to strengthen their financial structure.
The subsidiaries need to boost their capital adequacy ratios and raise working capital in the current volatile global financial market, reported Central News Agency.
In a statement posted on the Taiwan Stock Exchange, Cathay Financial said it will issue up to 1bn new common shares with a tentative price of NT$27-NT$41 in the upcoming rights issue.
This will be the second rights issue Cathay Financial has made since the company was established on 31 December 2001. The first was in September 2013, when the company raised NT$12.7bn by selling 350m new common shares at NT$36 per share.
Over the past two years, Cathay Financial raised funds through the sale of preferred shares: NT$42bn in 2017 and about NT$50bn in 2018, with both fund raising activities boosting Cathay Life’s working capital. A