Shares of China Steel Corp (中鋼) dropped 1.14 percent on the Taiwan Stock Exchange yesterday, despite the company's denial of reports that the government is considering selling its shares in the steelmaker by the end of the year.
China Steel fell NT$0.40 on the local bourse to close at NT$34.80, after a Chinese-language business daily said the government wanted to raise NT$12.2 billion through the share sale.
Shares opened lower and remained weak in morning trading, before rebounding mildly in mid-session after China Steel's spokesman announced that the government has no plan to sell its shares this year, according to traders.
The business daily reported that the government plans to sell 346 million shares in China Steel by the end of the year, or 3.5 percent of the 9.88 billion shares currently outstanding, at a market value of NT$35.2 per share, the price it closed at on the local exchange Friday.
The Ministry of Economic Affairs, on behalf of the government, may conduct the share sales through auctions, the paper added.
The ministry has been planning to lower its stake in the state-run China Steel from 23.5 percent to 20 percent to raise capital for its cash-strapped coffers.
"The Ministry of Economic Affairs will reach a final decision by the end of this month on whether it will ask the Executive Yuan's Development Fund (開發基金) to float the steelmaker's shares on its behalf," Lin Yi-fu (林義夫), chairman of the fund's management committee, told reporters yesterday.
The government is mulling plans to sell stakes in state-run enterprises such as China Steel, Chunghwa Telecom Corp (中華電信), China Airlines (華航) and Taiwan Tobacco & Liquor Corp (台灣菸酒).
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