＜Taipei＞ Industrial Bank of Taiwan (IBT), Hua Nan Commercial Bank and First Commercial Bank arranged a 3-year syndicated loan of NT$ 1 billion for Formosa Auto Leasing Corp. Ltd.（Formosa） The loan agreement was signed today (Sept. 9). The funding purpose is to improve the company’s financial structure and inject medium term working capital.

The loan agreement signing ceremony was held at the IBT Headquarters. Chairman Tso of Formosa and representatives of all syndicated banks singed the agreement. Totally six banks participated in the syndication: IBT, Hua Nan Commercial Bank, First Commercial Bank, Land Bank of Taiwan, Agricultural Bank of Taiwan, and Bank of Panhsin.

Founded in 2000 as a 100% subsidiary of Jih Sun International Leasing & Finance Co., Ltd., Formosa engages in passenger car leasing. Being the third largest car leasing company in Taiwan, Formosa has 18 maintenance locations, providing real-time, 24-hour free towing, and professional chauffeur services. With its extensive business network and economy scale, Formosa has competitive edge. Its clients include large corporations, foreign companies, banks and government agencies.

It is a common practice for corporations in America and Europe to enter into long-term lease for cars. Car leasing will reduce management cost and provide tax benefits and more efficient use of vehicles. As the concept for car leasing becomes more and more popular, the number of licenses issued for leased cars is increasing along the years. Formosa owns about 3000 vehicles, achieving an economy scale and promising stable future profits.

According to IBT, Formosa has a fairly stable operation. Most of the company’s customers are corporations, which tend to have lower default rate. Formosa has better financial structure than its peers do. Given continued growth momentum of car leasing industry, there is a bright outlook for the company’s revenue and profits. To help Formosa improve its financial structure and strengthen its working capital, IBT has planned for it a 3-year syndicated loan, which has won warm support from the syndicated banks. All the participating banks have held a positive outlook for Formosa’s future operation.