Taipei, May 9, 2008 (CENS)--Shin Kong Financial Holding has planned to invest NT$10 billion making major forays into the telecom sector, thereby creating a conglomerate spanning financial and telecom businesses, similar to Fubon Financial Holding and Far Eastern Group.

Eugene Wu, Shin Kong chairman, intends to join hands with KDDI, Japan`s CDMA (Code Division Multiple Access) carrier, in the aspects of fund and management, in executing the project, mainly by integrating a number of telecom businesses which Shin Kong already owns some interests.

The first step is to spend together with KDDI NT$20 billion to take over the beleaguered Asia Pacific Telecom, a fixed-line carrier which was originally a subsidiary of Rebar Group. Wu, though, has asked the latter to further decrease its capital to NT$15 billion, from existing NT$32.84 billion which has already been halved from the original level following a capital reduction.

Then, Wu will have Asia Pacific Telecom acquire via share swap two other telecom outfits in which Shin Kong also owns stakes, First International Telecom, a PHS (personal handyphone system) operator, and Great Taipei Broadband, a broadband Internet service provider, thereby creating a telecom group spanning fixed network, mobile phone, PHS, and WiMAX businesses.

Shin Kong now owns only 1.36% stake in Asia Pacific Telecom, but possesses 20% in First International Telecom, posing as the second largest shareholder, while Great Taipei Broadband is a subsidiary of Shin Kong Group.

The major blockade for the project is unwillingness of some major shareholders of Asia Pacific Telecom to carry out further capital reduction, after having suffered 50% cut on their original investments.

(by Philip Liu)