Cabinet plans Chunghwa sale

FUNDING: The Cabinet spokesman said the share release would be conducted in two stages to avoid adversely affecting the stock price given the size of the holding

By Shih Hsiu-Chuan  /  STAFF REPORTER

Fri, May 30, 2008 - Page 3

The government plans to release its shares in Chunghwa Telecom Co (CHT,中華電信), the nation’s biggest telecom operator, to help raise funds to support economic proposals aimed at cushioning the impact of recent price hikes in utilities and the fallout from the US subprime mortgage crisis, the Cabinet said yesterday.

“When to sell [CHT] shares and the size of the issue are contingent on the share price, but the government will maintain a stake of at least 30 percent,” Executive Yuan spokesman Vanessa Shih (史亞平) told a press conference after the weekly Cabinet meeting yesterday.

The Ministry of Transportation and Communications, CHT’s biggest shareholder, has a 35.63 percent stake in the company, which has a total capital of NT$95.58 billion (US$3.14 billion).

foreign holding

The company’s American depositary receipts (ADR), which started trading on the New York Stock Exchange in July 2003, currently represent 47.4 percent of the firm’s total shareholding. As this is near the 49 percent cap on direct foreign ownership, the government may have to raise the funds from the local capital market.

A main concern is the impact of selling such a large block of shares on the local market, with the government’s holding equivalent to about half of yesterday’s transaction amount.

To minimize such an impact, the share release will be implemented in two stages and not all in one go, Shih said.

The government aims to collect NT$52.8 billion from the share release plan to help fund its two supplementary budget proposals totaling NT$116 billion.

The Cabinet also passed two budget proposals to revise this year’s government budget, which had already been approved by the legislature, to facilitate implementation of President Ma Ying-jeou’s (馬英九) election platform.

Shih Su-mei (石素梅), the head of the Directorate General of Budget, Accounting and Statistics (DGBAS), said that the two budget proposals would strengthen public infrastructure investment, stabilize commodity prices following the recent hikes in utilities, help local governments repay deficits, among other things, to boost economic growth.

i-Taiwan projects

The Cabinet also approved yesterday a proposal by the Research, Development and Evaluation and Evaluation Commission to review and monitor the implementation of Ma’s proposed “i-Taiwan 12 projects.” Ma promised to invest NT$2.65 billion over the next eight years in the projects, which formed the basis of his economic platform during his presidential campaign in March.

“There are 414 measures that need to be completed under the ‘i-Taiwan 12 projects,’ which will involve 29 government departments. We will review how each department carries out its role and present an assessment report to the premier,” commission chairman Jiang Yi-hua (江宜樺) said.

In related developments, Premier Liu Chao-shiuan (劉兆玄) advised officials at the Cabinet meeting yesterday to learn to take public praise and criticism in stride.

Citing public reaction to the government’s announcement of gas and electricity price hikes on Tuesday, Liu said the Cabinet should focus more on whether the price adjustments could help the government achieve its goal of conserving energy and reducing carbon emissions.