Taiwan High Speed Rail Corp (THSRC,
The company may also sell shares abroad if the domestic offer is successful said chief financial officer Lee Sheau-jin (
He did not disclose the amount the Taipei-based builder plans to raise overseas to fund the so-called bullet train service, which will cost an estimated NT$461 billion.
THSRC needs to persuade investors to buy stock in a project that has already been delayed by a 13 percent cost overrun and may not make a profit in its first years of operation.
The company had to seek government permission to increase its debt ratio to raise funds for the 345km rail route, due to begin service by the end of next October.
"The first risk is to get enough funding to complete the project," said Tony Tsai (
"The second risk is getting enough passenger revenue. Very few companies like this can make a profit in the first two or three years of operation," he said.
THSRC will run its bullet train service from Taipei to Kaohsiung, cutting traveling time between the cities by two-thirds to 90 minutes. It will be able to carry 300,000 passengers everyday, for an average fare of NT$1,300 per person, almost triple the cost in a slower, conventional train.
Fubon Financial Holding Co (
"We are interested in being a long-term investor in the company as long as it can generate steady cash flow," said chief financial officer Victor Kung (
THSRC has said it plans to buy NT$95 billion of bullet trains, signaling and other systems from Mitsubishi Heavy Industries Ltd, Toshiba Corp, Kawasaki Heavy Industries Ltd, Mitsui & Co, Mitsubishi Corp, Marubeni Corp and Sumitomo Corp.
THSRC hasn't disclosed any detail on the pricing of its share offer. Investors, including Fubon, said they may buy more THSRC shares if the price is acceptable.
The company's shares currently trade outside Taiwan's stock exchange in a so-called gray market, the Emerging Stock Market (興櫃市場), for NT$8 a share, or about a fifth less than the NT$10 face value of its shares, according to Tsai. The shares' price rose after the construction risk was reduced, he said.
THSRC doesn't need to make a profit before its stock sale because it has been given a special status by the government to build, operate and transfer the right to manage the project for 35 years.
PATENTS: MediaTek Inc said it would not comment on ongoing legal cases, but does not expect the legal action by Huawei to affect its business operations Smartphone integrated chips designer MediaTek Inc (聯發科) on Friday said that a lawsuit filed by Chinese smartphone brand Huawei Technologies Co (華為) over alleged patent infringements would have little impact on its operations. In an announcement posted on the Taiwan Stock Exchange, MediaTek said that it would not comment on an ongoing legal case. However, the company said that Huawei’s legal action would have little impact on its operations. MediaTek’s statement came after China-based PRIP Research said on Thursday that Huawei filed a lawsuit with a Chinese district court claiming that MediaTek infringed on its patents. The infringement mentioned in the lawsuit likely involved
Taipei is today suspending work, classes and its US$2.4 trillion stock market as Typhoon Gaemi approaches Taiwan with strong winds and heavy rain. The nation is not conducting securities, currency or fixed income trading, statements from its stock and currency exchanges said. Authorities had yesterday issued a warning that the storm could affect people on land and canceled some ship crossings and domestic flights. Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) expects its local chipmaking fabs to maintain normal production, the company said in an e-mailed statement. The main chipmaker for Apple Inc and Nvidia Corp said it has activated routine typhoon alert
GROWTH: TSMC increased its projected revenue growth for this year to more than 25 percent, citing stronger-than-expected demand for AI devices and smartphones The Taiwan Institute of Economic Research (TIER, 台灣經濟研究院) yesterday raised its forecast for Taiwan’s GDP growth this year from 3.29 percent to 3.85 percent, as exports and private investment recovered faster than it predicted three months ago. The Taipei-based think tank also expects that Taiwan would see a 8.19 percent increase in exports this year, better than the 7.55 percent it projected in April, as US technology giants spent more money on artificial intelligence (AI) infrastructure and development. “There will be more AI servers going forward, but it remains to be seen if the momentum would extend to personal computers, smartphones and
Catastrophic computer outages caused by a software update from one company have once again exposed the dangers of global technological dependence on a handful of players, experts said on Friday. A flawed update sent out by the little-known security firm CrowdStrike Holdings Inc brought airlines, TV stations and myriad other aspects of daily life to a standstill. The outages affected companies or individuals that use CrowdStrike on the Microsoft Inc’s Windows platform. When they applied the update, the incompatible software crashed computers into a frozen state known as the “blue screen of death.” “Today CrowdStrike has become a household name, but not in