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Shipbuilder considering listing

"This [listing on the GRETAI Securities Market] is one of the options ... but we do not rule out holding a third round of bidding."

Fan Kuang-nan, acting chairman and president of CSBC Corp, Taiwan

CSBC Corp, Taiwan (台船), the nation's largest shipbuilder, is considering releasing 55 percent of its shares and listing on the GRETAI Securities Market after two failed attempts to auction off its shares as part of its privatization plan.

"This is one of the options [to privatize CSBC Corp, Taiwan] ... but we do not rule out holding a third round of bidding," Fan Kuang-nan (范光男), acting chairman and president of CSBC Corp, Taiwan, told the Taipei Times by telephone yesterday.

The Council for Economic Planning and Development, which is in charge of carrying out state-owned enterprises' privatization plans, will convene a cross-departmental meeting tomorrow to discuss the issue, Fan said.

The government planned to privatize CSBC Corp, Taiwan -- formerly known as China Shipbuilding Corp (中船) before its name change in March -- before the end of 2005 by auctioning off a 66 percent stake worth approximately NT$3.8 billion (US$116 million) in the Kaohsiung-based company.

But the two rounds of bidding -- one in October 2005 and another in September last year -- did not draw the minimum requirement of three bidders mandated by the government.

Taiwan Maritime Transport Ltd (台灣海陸) and a team led by China Steel Corp (中鋼) had submitted bids for the share sale. China Steel's team included Yang Ming Marine Corp (陽明海運), Cheng Lie Navigation Co (正利海運) and Yung Chi Paint and Varnish Mfg Co (永記造漆).

The third tender, if it were held, would be exempt from the rule and whoever submits the highest tender could win. However, CSBC Corp, Taiwan seems to be tilting in favor of a public listing.

Former chairman Frank Lu (盧峰海) said in a Lunar New Year address that the company would continue to push the privatization plan forward by applying for listing on the local bourse. The move would increase the company's capital and improve its finance, Lu said in a statement.

The meeting tomorrow, which will be attended by representatives from the Ministry of Economic Affairs, the Ministry of Finance, the Council of Labor Affairs and the Ministry of National Defense, will also discuss CSBC Corp, Taiwan's financial situation.

If the shipbuilder is determined as being in financial difficulty, the government will have to budget NT$5 billion to make up for the shortfall in CSBC Corp, Taiwan's pension fund before it can apply for listing.

CSBC Corp, Taiwan had been a money-losing business until 2001, when it carried out a restructuring plan.

The company posted pre-tax earnings of NT$1.49 billion, or NT$1.34 per share, on sales of NT$19.8 billion last year, compared with pre-tax earnings of NT$71.1 million on sales of NT$16.3 billion in 2005.

For this year, CSBC Corp, Taiwan targets earnings of NT$2.5 billion on sales of NT$24.4 billion, according to the company's Web site.
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