Taiwan's Chinatrust in talks to buy Tokyo Star Bank - report
Chinatrust Commercial Bank, one of Taiwan's largest commercial banks, is reportedly in talks to acquire Tokyo Star Bank for JPY50 billion ($582 million). Tokyo Star's shareholders, which include Lone Star Funds, have previously struggled to find interested buyers.
According to The Wall Street Journal, the shareholders - Lone Star, Shinsei Bank, Crédit Agricole, Aozora Bank and others - will likely make a decision on Chinatrust's offer early in 2013.
Local media added that the deal will come under scrutiny from Japan's Financial Services Agency, which is keen to see mid-size banks steer clear of the risky lending policies that endangered them during the global financial crisis.
Lone Star acquired Tokyo Sowa Bank from the Japanese government in 2001 and restructured the lender, renaming it Tokyo Star. It took the bank public in 2005 and sold a majority stake to Advantage Partners (AP) in 2007. AP took full ownership a year later, borrowing JPY170 billion from more than 20 lenders as a combination of senior and mezzanine debt.
After the private equity firm defaulted on the debt, Lone Star resumed control of the asset, with a 33% stake, and the remainder was divided up amongst the other creditors. As part of the agreement, Lone Star was exonerated of all payment responsibilities.
Last November, Lone Star and its fellow creditors hired Nomura to sell off Tokyo Star Bank. At that time, Australia and New Zealand Banking Group (ANZ) was said to be considering a move for the asset.
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