Taiwan High Speed Rail Offers New Reform Plan
The underperforming Taiwan High Speed Rail (THSR) yesterday introduced a new financing system that aims to increase the public sector’s stake in the company while slashing the price of a one-way ticket between Taipei’s main station and Kaohsiung’s Zuoying station from NT$1,630 to NT$1,490.
Under THSR’s new proposal, NT$30 billion will be raised by issuing shares to the government, the general public and THSR employees.
Government funds, including the pension fund and the labor retirement fund, will be tapped for the share acquisition. A total of NT$7.8 billion will be spent, giving the government up to seven board seats in THSR.
Along with three other independent directors, the public sector is poised to hold greater sway over the original five private directors, namely Continental Engineering Corporation (大陸工程), Pacific Electric Wire & Cable (太電), EVA Air (長榮航空), TECO (東元電機) and Taipei Fubon Commercial Bank (台北富邦銀行).
The public sector’s stake in THSR will grow from 22 percent to 25 percent, while the private sector’s stake will drop from 37 percent to 17 percent.
The general public and THSR company employees will buy the remaining share issuance, worth NT$19.2 billion and NT$3 billion, respective, according to the rail company’s plan.
THSR said it expects a stable level of profitability after the financial reform, and expects that the gains will be accessible to the public.
THSR’s new plan nixed a proposal to let the big stakeholders purchase NT$6.3 billion worth of stock. This time the railway company has asked them not to acquire more shares.
Source : China Post