Taiwan Today

The government plans to release shares of several state-owned enterprises in order to pay for the estimated NT$110 billion (US$3.43 billion) required for reconstruction in the aftermath of Typhoon Morakot, sources familiar with the issue said. This means that funding for post-Morakot reconstruction will not be financed entirely with public debts, they said, so that the special budget will not influence the country’s financial health. The state-owned enterprises whose shares might be sold include Taiwan Financial Holdings Co. Ltd. and Taiwan Tobacco and Liquor Corp., both supervised by the Ministry of Finance. Chunghwa Telecom Co. Ltd., currently regulated by the Ministry of Transportation and Communications, has also been named. It is believed that the 100-percent state-run Land Bank of Taiwan and the 40-percent state-owned Taiwan Cooperative Bank will also be under consideration if necessary. While the Cabinet has tentatively earmarked up to NT$110 billion for disaster relief, it does not rule out the possibility of raising the amount if further assessments by related ministries and agencies warrant such a revision. According to Minister of Finance Lee Sush-der, initial public offerings of shares of both TFH and TTL will be considered as the government tries to find ways to finance the reconstruction. The sizes of the two IPO’s will depend on the requirements of the special budget as well as the Legislature’s attitude, he said. Top officials at the MOF are also mulling over resubmitting a proposal to the Legislative Yuan to release additional shares of Chunghwa Telecom, on the condition that the government maintains at least a 30-percent stake in the telecommunications service provider. The latter move will inject over NT$40 billion to the special budget. TFH and Bank of Taiwan Chairwoman Susan Chang pointed out Aug. 16 that TFH will submit to the Legislature’s Finance Committee revisions to the Statute for Taiwan Financial Holdings Co. Ltd. for review in the Legislature’s next session. “We will strive to increase the upper limit of our public share offerings from 10 percent to 40 percent,” the chairwoman said. The MOF estimated that proceeds of a 10-percent IPO of TFH’s shares will amount to NT$23.7 billion. If the upper limit can be raised to 40 percent, it will raise the amount to NT$94.8 billion. If the stake to be released by TTL can be raised from 21 percent to 30 percent, it will pump more than NT$10 billion to the country’s treasury. This will greatly relieve the government’s dependency on debt, the ministry said. In related news, Tsai Hsun-hsiung, minister without portfolio, will convene Aug. 17 a joint meeting involving the Cabinet-level Council for Economic Planning and Development, the Public Construction Commission and financial and fiscal planning agencies, in order to discuss a special bill related to the rebuilding of Morakot-stricken areas.(SFC-HZW)