Tue, Aug 01, 2006 - Page 1 News List

THSRC gets NT$40.7bn loan from seven banks

By Shelley Shan  /  STAFF REPORTER

Seven domestic banks signed an agreement yesterday to provide NT$40.7 billion (US$1.27 billion) to help fund the nation's first bullet train.

Nita Ing (殷琪), chairwoman of the Taiwan High Speed Rail Corp (THSRC), said at the signing ceremony yesterday that the company had been seeking to adjust its finance model since last September, when she announced that the train's launch would be postponed for another year.

"It is a real joy and consolation as now the plan has been finalized," Ing said, adding that the government had been a supportive partner in the project.

Ing also said she had signed a preliminary pact with Deutsche Bank on the issuance of euro convertible bonds valued at US$200 million on the international market by the end of this year.

The Deutsche Bank agreement would help the company attract some overseas investors, she said, adding that THSRC was working with another well-known financial institution to secure an additional NT$20 billion. She refused to reveal any details of that deal.

Arthur Chiang (江金山), vice president of the THSRC's administration division, said that the NT$40.7 billion would be split into a NT$19.8 billion short-term loan and a NT$20.9 billion long-term loan.

He said THSRC had the ability to borrow up to NT$65.5 billion, and that other banks had shown interest in co-funding the firm's operations.

Chiang also said that attracting overseas investors had always been part of the company's financial plan.

"As the bullet train is scheduled to officially begin operating in October, more overseas investors will want to come in now as investment risks have been minimized," Chiang said.

Chen En-wen (陳恩文), senior vice president of Taipei Fubon Bank (富邦銀行), said that the THSRC had provided its assets, currently valued at more than NT$100 billion, as collateral.

The seven institutions involved in the agreement are Taipei Fubon Bank, Tachong Bank (大眾銀行), Taishin Financial Holding Co (台新金控), Fuhwa Bank (復華銀行), Bowa Bank (寶華銀行), Overseas Chinese Bank (華僑銀行) and China United Trust & Investment Corp (中聯信託).

Under the agreement, Tachong and Fuhwa are to provide loans of roughly NT$8 billion each.

Fubon and Taishin, meanwhile, will each offer a loan of about NT$7.8 billion. An additional NT$4 billion will come from Bowa, NT$3 billion from Overseas Chinese and NT$2 billion from China United.

In addition to representatives from these banks, officials from the Ministry of Transportation and Communications also attended the signing ceremony.

The firm had secured NT$30.83 billion in a previous loan.

After the announcement last year that the bullet train's launch would be delayed, media reports said that the company would need NT$65.5 billion to fund its operations.

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