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1. |
How was the
method of establishment of Cathay Financial Holdings decided? |
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- Single entity formation by share swap
After the in-depth analysis by advisors, it was concluded
that the method of "single entity formation by share
swap" is the fastest method with the best flexibility
to establish a holding company. Given the nature of this
method, Cathay Financial Holdings can on one hand easily
acquire other well-managed and financially healthy financial
institutions, and on the other hand continuously proceed
Holdings integration, in order to construct a financial holding
structure with competence.
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2. |
What are the impacts of
holding company establishment to the existing shareholders? |
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- The existing Cathay Life shareholders received shares
of Cathay Financial Holdings at the exchange ratio of 1:1.
Therefore, the number of outstanding shares of Cathay
Financial Holdings was the same as that of Cathay Life. The
rights of Cathay Life's shareholders will not be affected.
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3. |
What was the intention and
goals to establish a holding company? |
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- Increase the competence of the Holdings.
- Create synergy by cost saving, revenue increase, improve
profitability and EPS through cross-selling insurance/banking/securities
products.
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4. |
Why is the holding company
named as Cathay Financial Holdings instead of Lin Yuan Financial
Holding Company? |
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- Cathay is a well-known brand and enjoys customer recognition
and loyalty. At the same time it is also a listed name
in Taiwan stock exchange market.
- Using the name of "Cathay" is expected to
maximize the brand synergy.
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5. |
What are the essential differences
between holding companies has its core member as an insurance
company and a bank? How will it affect the succeeding managerial
strategy? |
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- There are different advantages of a holding company
with an insurance company or a bank as its core of establishment.
After the establishment the whole Holdings runs as an integrated
selling system, sharing each other's information, offices,
facilities and human resources. There is no distinction
from being the core- or sub- units.
- The performance of a holding company depends on the
effectiveness of integration, rather than the selection
of core entity.
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6. |
For the future merger and
acquisition activities, what will be the funding sources of
the holding company? |
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- Various funding alternatives will be carefully evaluated
based on the impacts on shareholder value, financial structure,
and the uses of funds (e.g. issuing depository receipts
or bonds will have different impact to shareholder's equity
and financial structure).
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7. |
What are the sources of
capital for the holding company? |
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- Cash dividend from subsidiaries
- Interest income derived from cash and bond investments
- Long and short term fund raising by means of issuance
of commercial paper, subordinated bond, etc
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