Chunghwa share sale on track

Chunghwa Telecom Co (中華電信), the nation's biggest phone company, yesterday said labor disputes will not hamper the government's plan to reduce its holdings in the firm to below 50 percent by the end of this year to privatize the phone company.

The remarks came ahead of a scheduled strike today by the Chunghwa Telecom Workers' Union to block further share sales. The strike is on the same day as the government undertakes its first step to choose three underwriters to help sell 1.45 billion common shares in the form of American Depositary Receipts (ADR).

"We believe there's a big chance for the government to lower its holdings to below 50 percent by the end of this year, in spite of the labor disputes," company spokesman Hank Wang (王漢朝) told the Taipei Times.

The government plans to reduce its ownership to below 50 percent, the threshold for state-run companies to qualify as privatized.

Wang said the government will choose three underwriters within the next two weeks and the ADR issuance will account for 15 percent of Chunghwa Telecom's total 9.5 billion shares.

In addition, the government also plans to auction an unspecified volume of shares at home on the same day, to achieve the goal of privatizing Chunghwa Telecom, he said.

The Ministry of Transportation and Communications currently still holds a 65 percent stake in Chunghwa Telecom, after six separate share sales over the past few years.

Chunghwa Telecom employees, however, oppose the government's plan to go ahead with its privatizing efforts before reaching an agreement with employees, mainly over retirement benefits.

"The planned overseas share sale will go against the legislature's resolution that allows the phone company to auction shares only after settling labor disputes," the head of the union, Simon Chang (張緒中), said.

"This is the last resort to safeguard our working rights and benefits after two years of negotiations with management failed to come up with any substantial conclusions. We request that the company postpone the issuance of ADRs," Chang said.

But Chunghwa Telecom chairman Ho Chen-tan (賀陳旦) said that the two sides had already reached a consensus on most issues. He said the company hopes to continue the discussions while at the same time holding share sales.

The union, however, said it would not rule out the possibility of taking more drastic measures to block the share sales if the company did not positively respond to the demand, Chang said.

Some 600 Chunghwa Telecom employees working at the company's headquarters are expected to go on strike today. It would mark the first strike after the union passed a resolution last December to enable the workers to strike as a means of safeguarding their rights and interests.

The resolution to strike was approved by 17,118 of the 17,356 employers who voted. The union has 28,000 members, the report added.