Despite doubts over its ability to pool sufficient funds in time to build the nation's first bullet train, the Taiwan High Speed Rail Corp (THSRC, 台灣高鐵) yesterday denied media reports that it will seek help from state-run enterprises to resolve its dire financial situation.
A Chinese-language newspaper reported yesterday that the Executive Yuan has been lobbying legislators under the table in an attempt to lift the ban that prohibits state-run enterprises' larger-scale investment in the company.
Under the Statute for the Encouragement of Private Sector Participation in Public Infrastructure Projects (
In 2002, however, the Legislative Yuan passed an incidental resolution, forbidding the government to venture further in the then much-criticized transportation project.
Since then, the government's investment in the mammoth project remained at 16 percent of THSRC's total capital.
According to the news report, since government funding only accounts for 16 percent of THSRC's total investment, transportation and Cabinet-level officials are busy urging the legislators to lift the resolution so that THSRC could pull in further investments.
The company said the report was groundless, saying that it is just about to convene a meeting with shareholders on March 4 on fundraising issues, according to a company statement released yesterday.
"We have no plans to seek help from the government. Instead, we intend to raise NT$13.5 billion through issuance of preferred shares," THSRC's vice president of public affairs, Arthur Chiang (
"We will ask for authorization from our shareholders in the meeting to issue the preferred shares," Chiang said.
After THSRC failed to meet its target of raising NT$7.5 billion (US$236.6 million) by the end of last year, the government-sponsored company postponed its entire fundraising schedule. As the company only secured NT$1.5 billion before its original deadline, it needs to raise NT$6 billion by next month.
In addition, it also plans to raise another NT$7.5 billion by May. Through issuance of preferred shares, the company believes, it will have a total of NT$13.5 billion in capital in its pocket in time.
"As the upcoming opening of operations in October gives a boost to investors' confidence, we are progressing well on fundraising," Chiang said in a telephone interview.
THSRC also said its five original shareholders -- Continental Engineering Corp (大陸工程), Teco Electric & Machinery Co (東元電機), Fubon Financial Holding Co (富邦金控), Pacific Electric Wire & Cable (太平洋電線電纜) and Evergreen Group (長榮集團) -- will continue to expand their investment in transportation infrastructure, the statement said.