Taiwan Tobacco drafts new proposal for its privatization

Following three years of unsuccessful privatization efforts, the state-run Taiwan Tobacco and Liquor Corp (台灣菸酒公司) is drafting a new privatization proposal, hoping to obtain Cabinet approval for privatization by the year-end, a company official said yesterday.

"Now we're devising a new version of the proposal and expect to submit it to the Ministry of Finance this month before delivering it to the Cabinet for further review," Martin Tsai (蔡木霖), the company's vice president, said on the sidelines of a press conference.

"We hope the Cabinet can give us the green light as soon as possible to facilitate our initial public offering (IPO)," Tsai said.

Taiwan Tobacco, formerly known as the Taiwan Tobacco and Wine Monopoly Bureau (菸酒公賣局), was incorporated in July 2002 and was scheduled to complete its privatization process within three years.

According to the original plan, the company would have had to issue an IPO last month, selling 30 percent of its shares this year and another 21 percent next year, to meet privatization targets.

However, strong opposition by the company's labor union has impeded the privatization process, despite former chairman Morgan Hwang's (黃營杉) efforts during his three-year tenure. The union is lobbying lawmakers to ensure that the 7,000 employees will keep their jobs

Hwang was appointed in July by the government to take over the chairmanship of Taiwan Power Co (Taipower, 台電), leaving the Taiwan Tobacco office to Ray Dawn (董瑞斌).

Dawn, 47, is a former director of Kaohsiung City's Bureau of Finance. After assuming the chairmanship of Taiwan Tobacco, he has requested a revaluation of the company's assets, facilities and factories, and has been pushing organizational restructuring.

As soon as the privatization proposal is approved by the Cabinet, the company will hire a financial consultant to assess its share-sale project, he said.

Minister of Finance Lin Chuan (林全) said in an interview on Monday that "the privatization of Taiwan Tobacco must not drag on for too long. We hope the company can submit its new proposal as soon as possible."