Taiwan may list the nation’s largest financial-services company next year and is in talks to sell shares in its biggest tobacco company, Minister of Finance Lee Sush-der (李述德) said.
An initial public offering of state-owned Taiwan Financial Holdings Co (台灣金控) may take place “sometime next year,” Lee said in an interview in Manila yesterday.
The government hasn’t determined the value of the stake to be sold, and is in talks with the labor union on a possible sale of shares in Taiwan Tobacco & Liquor Corp (台灣菸酒公司), he said.
Lee’e remark came after the Taipei-based Economic Daily News reported on Monday that the government plans to sell a 10-percent stake in Taiwan Financial at NT$26.3 (US$.80) per share.
The share sale is likely to bring in NT$23.7 billion for the state coffers, the Chinese-language newspaper reported, citing a budget book the Ministry of Finance plans to submit to the legislature for review in September.
The government combined the Bank of Taiwan (臺灣銀行) with its securities and life insurance units to create Taiwan Financial last year and spur local financial companies to merge.
The share sale may bring in more foreign competition, with China and Taiwan planning to allow cross-strait investment between financial firms.
“This is negative for the banking sector,” said Julie Chu, an analyst at SinoPac Securities Corp (永豐金證券) who rates the Taiwan banking industry “positive.”
“Taiwan’s banking industry is already congested. By having another stake owner, especially if it’s a foreign company, it could mean more competition in the already small market,” she said.
Taiwan’s financial industry had 37 local banks, 32 foreign lenders and more than 300 credit associations serving 23 million people as of January, the Financial Supervisory Commission’s Web site says.
The newspaper, citing unnamed ministry officials, said Taiwan Financial may increase the size of share sales to 40 percent from the initial 10 percent. On May 19, Taiwan Financial’s chairwoman Susan Chang (張秀蓮) said the company had suggested the government a share sale plan of as much as 40 percent through an IPO.
The ministry also plans to sell 21 percent of state-owned Taiwan Tobacco and list the company by the end of the year, the newspaper reported, citing unnamed officials.
In Manila, Lee said the ministry did not have a “definite timetable” for the sale.
Taiwan Tobacco is the nation’s the biggest tobacco company, KGI Securities Co (凱基證券) trader Randy Chang (張修華) said.
ADDITIONAL REPORTING BY STAFF WRITER