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Chunghwa Telecom eyes buyback

Chunghwa Telecom Co (中華電信), Taiwan's largest telephone operator, has revived plans to buy back and cancel up to one-tenth of its stock, worth NT$55.5 billion (US$1.6 billion), to help lift earnings per share.

The plan comes after the government, which owns a 65-percent stake in the company, said it aimed to sell a 14-percent stake this year to put more shares in private hands.

"We're planning to do the buyback after the stake is sold off," chairman Hochen Tan (賀陳旦) said.

The company will today hold its annual shareholders meeting, to be attended by the Chunghwa Telecom Workers Union, which opposed the planned buyback at last year's gathering.

The Ministry of Transportation and Communications, which owns the Chunghwa Telecom stake, plans to sell shares overseas and at home. The government will need to help with the buyback, Chunghwa spokeswoman Shen Fu-fu (沈馥馥) said earlier.

The union objected to the buyback, saying that the purchase was aimed at boosting government revenue. Last September the union demonstrated against a stake sale last year, a change it was concerned would cost jobs. Last November the government said it had scrapped plans for a sale of 180 million shares, or a 1.9-percent stake, in Chunghwa Telecom.

Taiwan sold more than one-third of the company during President Chen Shui-bian's (陳水扁) first term, including a US$1.37 billion stake to foreign investors last July.

Chunghwa's first overseas sale of shares followed three years of failed attempts. Goldman Sachs Group Inc, Merrill Lynch & Co and UBS AG managed the overseas offering. A new group might be appointed to manage future share sales, the ministry said.

Taiwan plans this year to also sell overseas a 3.2-percent stake in Taiwan Semiconductor Manufacturing Co (台積電) worth NT$38.3 billion as part of a plan to cut holdings in listed companies and help plug a budget deficit.

Shares of Chunghwa Telecom were down NT$1, or 1.8 percent, to close at NT$56.50 on the TAIEX.
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