REG-Shin Kong Financial Holding Co. Ltd.: Change of Fund Utilization Plan <Origin Href="QuoteRef">2888.TW</Origin>

Shin Kong Financial Holding CoAnnouncement

22/09/2017 11:55

Company code: 2888

No: 2

Subject: SKFH announces the change of funds utilization plan of the fourth
issue of domestic unsecured convertible corporate bonds

To which item it meets--article 4 paragraph xx: 16

Date of events: 2017/09/22

Contents:

1. Date of the board of directors resolution for the change: 2017/09/22

2. Dates of effective registration of the original plan: 2017/05/26

3. Reason or the change:

(1)The funds raised was planned to repay principal when the bondholders of
SKFH 2014 third issue of domestic unsecured convertible corporate bonds
exercise the put option. But until 2017/08/27, the record date to exercise the
put option of the third issue of domestic unsecured convertible corporate
bonds, the amount of put option exercised was only NT$41,500,000, leaving
NT$3,958,500,000 from the raised amount unused.

(2)Considering the original plan was to repay debt obligation and to
effectively utilize funds, the Company plans to change part of the funds
utilization items to repaying bank loans. This will save interest expense and
ease financial stress.

4. Content of each and every successive past changed plan for raising of funds
before and after change:

(1)Before change:

Item                                                 
Required amount

=====================================================================

a.       To repay the third issue of
domestic                   NT$4,000,000,000

unsecured convertible corporate bonds

(2)After change:

Item                                                 
Required amount

=====================================================================

a.       To repay the third issue of
domestic                   NT$1,300,000,000

unsecured convertible corporate bonds

b. To repay bank
loans                              
 NT$2,700,000,000

5. Anticipated timetable for execution:

(1)To repay the third issue of domestic unsecured convertible corporate bonds:

a. To repay NT$41,500,000: Execution to be completed in the third quarter of
2017.

b. To repay NT$1,258,500,000: Execution to be completed in the third quarter
of 2019.

(2)To repay bank loans: Execution completed in the fourth quarter of 2017.

6. Anticipated completion date:

(1)To repay the third issue of domestic unsecured convertible corporate bonds:

a. To repay NT$41,500,000: Expect to complete by the third quarter of 2017.

b. To repay NT$1,258,500,000: Expect to complete by the third quarter of 2019.

(2)To repay bank loans: Expect to complete by the fourth quarter of 2017.

7. Anticipated possible benefits:

(1)To repay the third issue of domestic unsecured convertible corporate bonds:
Expect to save interest expense by NT$5,417,000 in 2017.

(2)To repay bank loans: Expect to save interest expense by NT$4,483,000 in
2017.

8. Difference with original anticipated benefits:

(1)To repay the third issue of domestic unsecured convertible corporate bonds:
The amount of interest expense which can be saved decreases NT$11,250,000.

(2)To repay bank loans: The amount of interest expense which can be saved
increases NT$4,483,000.

9. Effect of the current change on shareholder equity:

The Company changes the funds utilization plan to retain credit line and
remain stable revolving capacity, so as to meet the needs for economic changes
and financial plans, which will help increase funds utilization and
flexibility, as well as improve financial structure. In the long run, the
change of plan has no significant effect on shareholder equity.

10. Abstract of the original lead underwriter's appraisal opinion:

The change of plan is because the majority of bondholders of the third issue
of domestic unsecured convertible corporate bonds did not exercise the put
option, leaving some raised amount unused. Considering the plan was to repay
debt and improve fund utilization, the Company planned to use the unused fund
to repay bank loans to increase effectiveness of funds utilization and improve
financial structure, so the change of plan is reasonable and necessary.

11. Any other matters that need to be specified: None



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