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CSBC reactivates privatisation plan

Kaohsiung: State-run CSBC Corp, Taiwan (CSBC) plans to sell a majority of its shares in line with its goal of completing its long-delayed privatization by the end of this year.

The proposed share sale is also expected to help CSBC, formerly known as China Shipbuilding Corp, raise capital for capacity expansion amid increasing orders for its vessels.

"As the business of international shipping lines continue to boom and shipbuilding shares have performed particularly well in the [South] Korean and Chinese stock markets in recent years, this year poses the best opportunity for CSBC's privatization," the State-owned Enterprise Commission said in a statement on Friday.

The Kaohsiung-based firm's attempts to sell up to 66 percent of its shares failed twice in the past three years, with the offers attracting few bidders. The sale was also affected by negative industry factors, including rising raw material costs, sharp expansion in worldwide shipbuilding capacity and global macroeconomic uncertainties.

This time, the company plans to sell between 51 percent and 55 percent of its shares at one time and has selected Fubon Securities Co as its main underwriter and financial adviser, a statement posted on the Ministry of Economic Affairs' Web site said.

It is not clear, however, when the share sale will begin or how much capital CSBC will raise from the sale. Its previous proposals called for selling a 66 percent stake to raise approximately NT$3.8 billion (US$118.8 million).

The statement said this year's share sale would be held through a public auction and still target institutional investors, as well as upstream and downstream companies in the shipping business.

But unlike its previous attempts, a portion of the 50 percent to 55 percent stake will be sold to individual investors and company employees, the statement said, without specifying the size of the retail subscription.

CSBC was planning to list its shares on the over-the-counter GRETAI Securities Market , but may change this to listing on the nation's main bourse, the Taiwan Stock Exchange, the statement said.

Fubon Securities is conducting an assessment of the share listing on the Taiwan Stock Exchange before submitting a final proposal to the ministry for review, said the commission, which oversees the business management of state companies, including CSBC.

CSBC reported a record pre-tax income of NT$4.74 billion last year. Earnings after deducting pension provisions reached NT$2.45 billion, compared with NT$1.49 billion in 2006.

The company is the nation's largest shipbuilder with one shipyard in Kaohsiung and another in Keelung. Its current backlog of orders is expected to keep CSBC busy until 2012, the commission's statement said.  [11/02/08]

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