Chunghwa Telecom plans to dispose of 17% stocks in Q2

Taipei, Jan. 28, 2005 (CENS)--The state-run Chunghwa Telecom Co., Ltd. Will sell 17% of its stocks in the second quarter at home and overseas, with 15% planned to be sold by issuing American depository receipts (ADRs) and the remaining 2% via auctions or subscriptions.

The Ministry of Transportation & Communications (MOTC), the telecom carrier's regulator, will announce foreign and domestic underwriters of the stock selling shortly after the upcoming Chinese New Year holidays, which will begin on Feb. 6.

The selling is expected to inject at least NT$100 billion (US$3.1 billion) into national treasury. The stock selling, once done, will make the telecom provider a private enterprise by lowering its government ownership to below 50%. So far, the telecom provider has sold 35.11% of its stocks to the private sector.

Minister L.S. Lin of MOTC pointed out that privatization of the state-run telecom carrier should be carried out as soon as possible based on cost concern. He hoped the privatization goal to be achieved by the end of this year. To attain this goal, Chunghwa will have to release at least 17% of its stocks since 2% of its disposed stocks are held by a state-run enterprise.

An MOTC official said that Chunghwa decided to sell part of its shares overseas considering that the island's stock market is not big enough to absorb the stocks it is going to sell. The stocks are estimated to value at around NT$100 billion on the basis of NT$60 per share. Taiwan's stock market has average transaction value of barely NT$100 billion per day over the past few months.

Report has it that many foreign institutional investors including Merrill Lynch & Co.,

Nomura Securities Co., Ltd. And Goldman Sachs & Co. already contacted the MOTC to express their interests of bidding for underwriting right of the Chunghwa's ADR deal.