Nan Shan to issue 472.2 mil. new shares

The China Post news staff

TAIPEI, Taiwan — Nan Shan Life Insurance Co., a major life insurer in Taiwan, will issue 472.2 million new shares at NT$100 each for a capital increment of NT$47.22 billion, in a bid to meet the required capital adequacy ratio and safeguard the interests of the insured, the firm’s president Chen Ren-lin said yesterday.

Chen told a press conference that his firm’s board of directors approved the capital increment bill on October 3, the second of its kind launched by the firm this year. Once the bill is approved by government authorities here, the American International Group (AIG) Inc. will immediately funnel inject NT$47.22 billion into Nan Shan to subscribe to the new shares to be issued by the local life insurer. AIG now owns a 95 percent stake in Nan Shan. Chen said he has been told by the parent group that it would keep some Asian insurance firms in which it holds majority stakes, while selling off some overseas subsidiaries, adding that Nan Shan is among the firms AIG will keep.

AIG won’t rule out introducing strategic investors into Nan Shan in the future, according to Chen. Nan Shan’s aggregate assets amount to NT$1.5 trillion, and its financial structure will become even more robust after the second round of capital increment is completed, according to company sources.

AIG had to be bailed out with an $85 billion loan from the U.S. Federal Reserve last month as the credit crunch worsened. It plans to sell 472.2 million new shares at NT$100 each, and existing shareholders can subscribe for three new shares for every two held, according to a statement on the firm’s Web site. The share sale will raise cash and boost the risk-based capital ratio, according to the statement. RBC represents an amount of capital, based on an assessment of risk, which a company should hold to protect customers against adverse developments. Taiwan requires insurers to have a minimum ratio of 200 percent.