Chunghwa Telecom Co (中華電信) is mulling the sale of up to 800 million shares primarily to overseas investors in the third quarter, in accordance with the share sale plan of its major shareholder, a company executive said yesterday.
The company's biggest shareholder, the Ministry of Transportation and Communications, reduced its holdings to 41.2 percent in Chunghwa Telecom after it sold a combined 16.4 billion shares last August, mainly in the form of American Depositary Receipts in New York and in an after-hours auction at home.
"The ministry has recently planned to sell more, about 7.4 percent, but it has not finalized details about the scale and date," Chunghwa Telecom chairman Hochen Tan (賀陳旦) said.
The ministry may adopt a similar approach to last year's share sale by offering a big portion to overseas investors and allocating a small part for local investors, Hochen said.
"The timing could be similar to last year," he said.
The 7.4 percent stake planned for sale is equivalent to about 714 million common shares.
Taiwan Mobile Co (台灣大哥大), the nation's No. 3 mobile carrier, also decided to offer 100 million Chunghwa Telecom shares it owns in the overseas share sale, company spokeswoman Josephine Juan (阮淑祥) said. The planned share sale was approved by the company's board yesterday, she said.
After the sale, Taiwan Mobile would own 50 million Chunghwa Telecom shares.
To clear the final obstacle for the sale of 800 million shares in the US, the government needs to lift the cap on foreign investor holdings in Chunghwa Telecom companies to 49 percent.
Overseas investors now already own 39.36 percent in Chunghwa Telecom, nearing the 40-percent ceiling.
"If the government raised the ceiling, I believe foreign investors would be very interested in subscribing for Chunghwa Telecom shares," said Lu Chia-lin (呂家霖), a telecom analyst with Yuanta Core Pacific Securities (元大京華證券).
The brokerage house recently received numerous calls from clients asking for details about Chunghwa Telecom's planned share offering, Lu said.
The ministry raised US$666.2 million from selling 35.1 million units of ADRs, or 135.1 billion common shares, at US$18.98 per unit in the fall of last year during its debut in the US.
In other words, Chunghwa Telecom was selling shares at NT$60 a share.
Shares in Chunghwa Telecom rose 0.43 percent to NT$59.3 on the Taiwan Stock Exchange yesterday.
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