Taiwan Fertilizer Co said yesterday that after two failed attempts it finally had managed to complete a share auction by which the state ceded control to the private sector.
"After the latest sale, the state's stake in the firm is below 50 percent. We have completed the privatization program," said a Taiwan Fertilizer spokesman.
The spokesman said Taiwan Fertilizer had completed the planned sale of 131.773 million shares, or 18.82 percent of the company's total, leaving the Ministry of Economic Affairs and other state agencies in control of 47.86 percent.
As the leading minority shareholder, the state will retain a significant degree of management clout and will likely have a decisive say in the naming of Taiwan Fertilizer's chairman and senior management.
The state treasury earned NT$6.86 billion through the auction, completed at an average price of NT$52.06 per share. The company has a total asset value of NT$57.1 billion.
The stock auction was conducted at the Taiwan Stock Exchange over three trading sessions from August 27, the spokesman said.
Taiwan Fertilizer initially had planned to auction off a 189 million share, 27 percent stake in late June but managed to find buyers for only 57.23 million shares, or 8.18 percent.
Not a single share was sold in a mid-July effort to sell the remaining 131.773 million shares, as the stock market was being hammered by fresh Taiwan-China tensions triggered by President Lee Teng-hui's demand that Beijing regard the island as a state.
Taiwan Fertilizer's privatization has been anything but smooth and was completed more than a year behind the initial target date of June 1998.
In March 1998, the firm auctioned off a 25 percent stake, but parliament blocked the auction of the subsequent 35 percent stake on the grounds that the shares sold in the first round were well below market prices.
Parliament approved the second share release in early 1999.
Under a broad privatization drive begun in 1989, the state is dismantling monopolies in several sectors and has sold off controlling interests in several major state companies.
The privatization drive goes into high gear in the coming two years, as the government pares its stakes in several state giants -- including Chunghwa Telecom and Chinese Petroleum.
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