Far EasTone Telecommunications Co (遠傳電信), the nation’s third-largest telecom operator, yesterday obtained shareholder approval for a proposed 12 percent share sale to China Mobile Co (中國移動), allowing the phone company to file the equity sale with the government.
Shareholders also gave the green light to the management’s proposal to issue 444 million common shares to raise NT$17.77 billion (US$540 million) via private placement to facilitate mergers and acquisitions, or to invest in new business, the company said in a statement.
On April 29, Far EasTone signed a memorandum of understanding with Beijing-based China Mobile to sell it a 12 percent stake for NT$17.77 billion. China Mobile is the biggest telecom operator in China.
“We believe the proposals approved during today’s shareholder meeting will benefit the company’s development,” Far EasTone chairman Douglas Hsu (徐旭東) said in a statement.
At yesterday’s annual shareholders meeting, Hsu called on the government to adopt a more open attitude to help local companies enter the Chinese market. He said local companies were facing mounting pressure amid intensifying competition, weakening consumption and price controls at home, the statement said,
Despite the shareholder’s decision, investment from China Mobile is still subject to government approval. The Mainland Affairs Council said last month that for the time being telecommunications was not a sector that could open to Chinese investment.
Hsu said yesterday the company would not rule out the possibility of forming a joint venture with China Mobile in China prior to the close of the share sale.
Shareholders yesterday also approved the plan to deliver cash dividends of NT$2.8 per common share based on last year’s net income of NT$10.16 billion.
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