12 banks set sights on Chunghwa Telecom ADR deal

Chunghwa Telecom Co (中華電信), Taiwan's No.1 phone company, yesterday said 12 investment banks joined the bidding to help sell a 15 percent stake owned by the government to overseas investors.

``Twelve investment banks tendered their proposals to us,'' said Chiu Shu-mei (邱淑梅), an associate administrator at the company's public relations division.

The 12 bidders are Goldman Sachs, UBS, Merrill Lynch, Morgan Stanley, JPMorgan, Nomura Securities, Daiwa Securities, Lehman Brothers, ABN AMRO, CSFB, Citibank and Deutsche Bank, Chiu said.

They are competing to help sell 1.45 billion common shares in the form of American Depositary Receipts (ADRs).

"We will pick three underwriters on May 27 to manage the overseas share sale," Chiu said.

The Ministry of Transportation and Communications, the company's largest shareholder, plans to reduce its ownership in Chunghwa Telecom to below 50 perecnt, the threshhold for state-run companies to qualify as privatized.

Currently, the ministry owns a 65 percent stake in the company.

Company employees, however, are opposed to the proposed share sales. Hundreds of Chunghwa Telecom workers walked out of their jobs yesterday morning and rallied outside the company's headquarters, protesting the privitization plan, which they said jeopardizes their benefits.

Some scuffled with police, who tried to prevent them from blocking colleagues from going in to work.

At least four strikers were arrested. Chunghwa Telecom Workers' Union accused the police of excessive action.

"We will step up protests against the privatization plan for Chunghwa Telecom because the move will only benefit big business groups," said Simon Chang (張緒中), secretary-general of the union.

Chang said the union is planning more strikes across the nation as early as next month as the company did not react positively to their request to postpone the ADR issuance.

The firm has 28,000 employees.

Yesterday's strike lasted for a few hours in the morning and did not affect regular telecom services, company officials said.

The ministry has warned that such strikes are illegal under regulations that prohibit such action by workers in public utilities.

During the first share-sale in December 2002, the ministry sold a 13.48 percent stake to companies affiliated with the Cathay Life Insurance Co (國泰人壽) and Fubon Group (富邦集團).