Chunghwa abandons USD1.5 billion offering

3 Aug 2006

Taiwan’s Chunghwa Telecom has abandoned a USD1.5 billion share offering following government infighting over rules governing the appointment of investment banks for the sale, writes the Financial Times. The Taiwanese government, which began selling shares in Chunghwa in 2003, currently has a 41% stake in the company. The Ministry of Transportation and Communications was recently charged with overseeing a sale of an additional 8% tranche, most of which was expected to have been sold to international investors. Chunghwa last month invited investment banks to pitch for the role of advisor and had expected to unveil the victors last week. However, the Ministry of Finance intervened to insist that the company complied with anti-corruption government procurement laws that state that a 28-day bidding period must elapse before mandates can be awarded for state asset and share sales. The stance came as a surprise to the company and to bankers, as – since the state’s stake dropped below 50% – Chunghwa has been legally free to pick its advisers without recourse to the government procurement laws.

Taiwan, Chunghwa Telecom