Sun, Nov 03, 2002 - Page 1 News List

Government to speed up large sell-off

PRIVATIZATION The government hopes that selling shares in state-owned companies will bring more than NT$600 billion into it coffers


The government intends to speed up privatization of its state-run businesses and aims to complete privatization of at least seven state-run enterprises by the end of 2004.

"The government not only will speed up the pace of privatization, but will also first upgrade the competitiveness of these businesses by improving their performance," Vice Premier Lin Hsin-yi (林信義) said yesterday at a meeting of the national asset management committee.

Through the privatization process, the government hopes to raise NT$617.2 billion over the next five years, according to a preliminary study by the Council for Economic Planning and Development.

According to the government's schedule, six state-own enterprises will complete privatization by the end of 2003. They are: Chinese Petroleum Corp (中油), Aerospace Industrial Development Corp (漢翔航空), China Shipbuilding Corp (中船), Taiwan Salt Industrial Corp (台鹽), Kaohsiung Ammonium Sulfate Co (高雄硫酸錏) and Taiwan Agricultural & Industrial Development Corp (台灣農工).

The privatization timetable of Taiwan Motor Transport Co (台汽客運), Taiwan's state-owned long-distance bus operator, has also been moved forward from the end of 2006 to some time in 2004, the committee said..

The Directorate General of Posts (郵政總局) is scheduled to be corporatized in 2003 and is expected to formulate a timetable for its privatization soon after incorporation.

Among the firms to be privatized, Chinese Petroleum Corp plans to release 44.69 percent of the shares to local and foreign investors and 24 percent to the company's employees. However, the government will retain at least 34 percent of the shares because of the importance of petroleum.

Lu Chi-cheng (呂桔誠), vice chairman of the Commission of National Corporations disclosed that the company has looked at forming strategic partnerships with multi-national enterprises which can provide stable oil sources for the company.

However, a local news report said that Chinese Petroleum's privatization may be slowed down by opposition from its employees as many middle-aged workers are worried that they may not keep their jobs after the transition and protested to their lawmakers asking them to stop the privatization.

The report also noted a difficulty for the privatization of Aerospace Industrial Development because the Sept. 11 terrorist attacks in the US and the crash of a China Airlines jet earlier this year has affected the confidence of some potential investors.

China Shipbuilding Corp (中船) has a better outlook for its privatization after targeting a profit of NT$70 million in 2003 after laying off 2,280 of its 5,025 employees and restructuring its organization. The company plans to build frigates for the navy in collaboration with other foreign frigate makers.

Kaohsiung Ammonium Sulfate Co (高雄硫酸錏) has decided to liquidate its assets while Taiwan Agricultural & Industrial Development Corp (台灣農工) will sell some of its assets to proceed with the privatization.

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