CSBC set to complete IPO in November

State-run CSBC Corp, Taiwan (CSBC, 台灣國際造船), formerly known as China Shipbuilding Corp, plans to complete its privatization by selling 51 percent of its shares in November, a company executive said yesterday.

"We hope to complete the company's listing on the Taiwan Stock Exchange in early November," CSBC president Lee Chih-cheng (李志誠) said yesterday in a telephone interview.

Lee, who had vowed to prioritize the company's initial public offering (IPO) this year after taking office last month, submitted the IPO application to the Securities and Futures Bureau under the Financial Supervisory Commission yesterday.

The planned sale of a 51-percent stake, or 340 million shares, is expected to result in a minimum market capitalization of NT$6.6 billion (US$215.4 million), as the company's current net worth is estimated at NT$19 per share, Lee said.

However, up to 35 percent of the planned sale, or 17.85 percent of the shares, may be reserved for CSBC employees, with the final employee ownership ratio to be decided at a shareholder meeting in June, Lee said.

The company's 2,700 employees would acquire the shares in late October, CSBC vice president Wang Keh-hsuan (王克旋) said yesterday.

Upon completion of the employee ownership phase, the remaining shares would be sold on the open market to private investors around Oct. 22, Wang said.

Fubon Securities Co (富邦證券), the underwriter of the Kaohsiung-based shipbuilder's share sale, will take up any remaining shares that are not sold to private investors, he said.

Sales at the nation's largest shipbuilder, with assets of NT$11.14 billion, reached NT$29.1 billion last year, resulting in a net profit of NT$2.2 billion. The company estimates sales for this year at NT$35 billion, Lee said.

CSBC said in January that it had secured orders until mid-2012, including a contract for six cargo ships signed with Wan Hai Lines Ltd (萬海航運) at a price of US$36.5 million per ship. It has also secured a contract for five cargo ships with Yang Ming Marine Transport Corp (陽明海運) and has NT$10 billion in orders for commercial ships and another NT$10 billion in orders from the military.

CSBC chairman Cheng Wen-long (鄭文隆) said he hoped the planned privatization would help beef up the shipbuilder's competitiveness and turn its design capabilities into an intangible asset while maximizing profits.

Since the government will remain the biggest shareholder with a 49 percent stake, a management reshuffle after the IPO was not likely, Wang said.