Taiwan said it will have to wait until after the March presidential election to arrange a US sale of a 3-percent stake in Taiwan Semiconductor Manufacturing Co (TSMC,
"It will still take some time to select an investment bank," said James Ho, deputy executive secretary of the Cabinet's Development Fund, responding to a Chinese-language newspaper report that said the sale had been canceled. "We won't be able to sell the stake before the election."
The planned sale of 640 million shares, worth NT$67.50 each based on Friday's closing price, would cut the government's stake in TSMC to 4.6 percent from 7.7 percent, opposition lawmaker Thomas Lee (
The Development Fund last year developed a plan to sell the shares for NT$71.50 each, a 5.6 percent premium, Lee said. The government needs the money to help plug a budget deficit. Taiwan, which is facing its biggest-ever budget deficit of NT$257.4 billion this year, needs to keep annual borrowing at less than the limit of 15 percent of expenses.
Premier Yu Shyi-kun on Nov. 24 urged opposition parties, which have a majority in the legislature, to set aside pre-election wrangling and pass a separate NT$500 billion budget appropriation to fund public works and boost the economy.
The government pared its stake in TSMC from 9.56 percent in July of last year, raising US$822 million, after having sold a 1.5-percent stake in the company for US$871 million in 2002.
The chipmaker's shares would be sold in the form of American Depositary Receipts (ADRs), with five ordinary shares packaged as one ADR.
ADRs of some Taiwanese companies trade at premiums over the underlying shares because the government restricts overseas investment in shares sold in the domestic market.
The government is planning more asset sales to finance spending as President Chen Shui-bian (
The government has increased spending on social welfare at the expense of public works projects, Lee said.
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