Taiwan High Speed Rail Corp (THSRC,
The company may also sell shares abroad if the domestic offer is successful said chief financial officer Lee Sheau-jin (
He did not disclose the amount the Taipei-based builder plans to raise overseas to fund the so-called bullet train service, which will cost an estimated NT$461 billion.
THSRC needs to persuade investors to buy stock in a project that has already been delayed by a 13 percent cost overrun and may not make a profit in its first years of operation.
The company had to seek government permission to increase its debt ratio to raise funds for the 345km rail route, due to begin service by the end of next October.
"The first risk is to get enough funding to complete the project," said Tony Tsai (
"The second risk is getting enough passenger revenue. Very few companies like this can make a profit in the first two or three years of operation," he said.
THSRC will run its bullet train service from Taipei to Kaohsiung, cutting traveling time between the cities by two-thirds to 90 minutes. It will be able to carry 300,000 passengers everyday, for an average fare of NT$1,300 per person, almost triple the cost in a slower, conventional train.
Fubon Financial Holding Co (
"We are interested in being a long-term investor in the company as long as it can generate steady cash flow," said chief financial officer Victor Kung (
THSRC has said it plans to buy NT$95 billion of bullet trains, signaling and other systems from Mitsubishi Heavy Industries Ltd, Toshiba Corp, Kawasaki Heavy Industries Ltd, Mitsui & Co, Mitsubishi Corp, Marubeni Corp and Sumitomo Corp.
THSRC hasn't disclosed any detail on the pricing of its share offer. Investors, including Fubon, said they may buy more THSRC shares if the price is acceptable.
The company's shares currently trade outside Taiwan's stock exchange in a so-called gray market, the Emerging Stock Market (興櫃市場), for NT$8 a share, or about a fifth less than the NT$10 face value of its shares, according to Tsai. The shares' price rose after the construction risk was reduced, he said.
THSRC doesn't need to make a profit before its stock sale because it has been given a special status by the government to build, operate and transfer the right to manage the project for 35 years.
ISSUES: Gogoro has been struggling with ballooning losses and was recently embroiled in alleged subsidy fraud, using Chinese-made components instead of locally made parts Gogoro Inc (睿能創意), the nation’s biggest electric scooter maker, yesterday said that its chairman and CEO Horace Luke (陸學森) has resigned amid chronic losses and probes into the company’s alleged involvement in subsidy fraud. The board of directors nominated Reuntex Group (潤泰集團) general counsel Tamon Tseng (曾夢達) as the company’s new chairman, Gogoro said in a statement. Ruentex is Gogoro’s biggest stakeholder. Gogoro Taiwan general manager Henry Chiang (姜家煒) is to serve as acting CEO during the interim period, the statement said. Luke’s departure came as a bombshell yesterday. As a company founder, he has played a key role in pushing for the
China has claimed a breakthrough in developing homegrown chipmaking equipment, an important step in overcoming US sanctions designed to thwart Beijing’s semiconductor goals. State-linked organizations are advised to use a new laser-based immersion lithography machine with a resolution of 65 nanometers or better, the Chinese Ministry of Industry and Information Technology (MIIT) said in an announcement this month. Although the note does not specify the supplier, the spec marks a significant step up from the previous most advanced indigenous equipment — developed by Shanghai Micro Electronics Equipment Group Co (SMEE, 上海微電子) — which stood at about 90 nanometers. MIIT’s claimed advances last
CROSS-STRAIT TENSIONS: The US company could switch orders from TSMC to alternative suppliers, but that would lower chip quality, CEO Jensen Huang said Nvidia Corp CEO Jensen Huang (黃仁勳), whose products have become the hottest commodity in the technology world, on Wednesday said that the scramble for a limited amount of supply has frustrated some customers and raised tensions. “The demand on it is so great, and everyone wants to be first and everyone wants to be most,” he told the audience at a Goldman Sachs Group Inc technology conference in San Francisco. “We probably have more emotional customers today. Deservedly so. It’s tense. We’re trying to do the best we can.” Huang’s company is experiencing strong demand for its latest generation of chips, called
GLOBAL ECONOMY: Policymakers have a choice of a small 25 basis-point cut or a bold cut of 50 basis points, which would help the labor market, but might reignite inflation The US Federal Reserve is gearing up to announce its first interest rate cut in more than four years on Wednesday, with policymakers expected to debate how big a move to make less than two months before the US presidential election. Senior officials at the US central bank including Fed Chairman Jerome Powell have in recent weeks indicated that a rate cut is coming this month, as inflation eases toward the bank’s long-term target of two percent, and the labor market continues to cool. The Fed, which has a dual mandate from the US Congress to act independently to ensure