Final tallies for Chunghwa Tele-com's (中華電信) auction-style share sale were announced yesterday, with the average bidding price only climbing NT$5 over the floor price to NT$109.01, and the market's rather cool response toward the sale leaving around 80 million shares unsold from the 3 percent offering.
Of the 289 million shares on offer, only 208.65 million, or 72 percent, were accounted for during last week's bidding, raising NT$22.74 billion for state coffers, said executives from Chinatrust Commercial Bank, (
The remaining 80.77 million shares will be added on to the 13 percent of Chunghwa stock scheduled to be released next month via public subscription at the auction's floor price of NT$104, said executives.
The highest bid at NT$166 and was for 6,000 shares, while the most popular bidding price among investors was NT$105 at which price 31.7 million shares received bids.
Chunghwa is scheduled to release around 5 percent of its shares to company employees by the end of the year and sell 12 percent on the New York Stock Exchange sometime early in 2001 via American depositary receipts.
The ADR release will complete a 33 percent sell-off of government shares in the utility and is likely to bring in a NT$300 billion windfall into government coffers.
When Chinatrust announced on Monday preliminary results of last week's auction, it said that institutional and foreign investors had stayed away because of a fair market valuing for the stock had left little room for profits, upper management problems at Chunghwa and employee discontent with privatization.
Executives from Chunghwa said yesterday that the reason why the results of the auction hadn't been ideal was that institutional investors had failed to see Chunghwa's hidden potential and future development.
Wei Hua-mei (
Asked whether she feared Taiwan Cellular's (台灣大哥大) plan to list on the over-the-counter TAISDAQ market in mid-September would impact the second phase of Chunghwa's share release, Wei said she wasn't concerned.
"Chunghwa is the leading player in the telecom [local] market; that isn't about to change," she said.
"We cover all areas of the telecom market including mobile, fixed line and Internet," Wei said.
Wei's sales pitch is similar in tone to the slick ad campaign the state-run utility has been running in the local media recently, with ads listing Chunghwa's wares including seven satellites, 32 international submarine cables, and 4,016 mobile telephone base receiver stations. This aim is to show the diversity of Chunghwa's strengths in an industry where fast-growing competition has ended the utility's monopoly, with the mobile phone market having already been liberalized and the fixed-line market set to open next year.
One half-page ad splashed across the front page of a prominent Chinese-language newspaper, depicted Chunghwa as a "Telecom giant set free" from the bonds of government control and promised that more effective and flexible management would reap greater profits for investors.
One line of the ad claims that "Today Chunghwa is the leader in the domestic market, tomorrow it will be a star on the international telecommunications stage."
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