[Intl-tobacco] Taiwan Tobacco drafts new proposal for its privatization

[Robert Weissman]

Published on TaipeiTimes <http://www.taipeitimes.com>
http://www.taipeitimes.com/News/biz/archives/2005/09/07/2003270725

Taiwan Tobacco drafts new proposal for its privatization

By Jackie Lin
STAFF REPORTER
Wednesday, Sep 07, 2005,Page 10

Following three years of unsuccessful privatization efforts, the
state-run Taiwan Tobacco and Liquor Corp is drafting a new privatization
proposal, hoping to obtain Cabinet approval for privatization by the
year-end, a company official said yesterday.

"Now we're devising a new version of the proposal and expect to submit
it to the Ministry of Finance this month before delivering it to the
Cabinet for further review," Martin Tsai, the company's vice president,
said on the sidelines of a press conference.

"We hope the Cabinet can give us the green light as soon as possible to
facilitate our initial public offering (IPO)," Tsai said.

Taiwan Tobacco, formerly known as the Taiwan Tobacco and Wine Monopoly
Bureau, was incorporated in July 2002 and was scheduled to complete its
privatization process within three years.

According to the original plan, the company would have had to issue an
IPO last month, selling 30 percent of its shares this year and another
21 percent next year, to meet privatization targets.

However, strong opposition by the company's labor union has impeded the
privatization process, despite former chairman Morgan Hwang's efforts
during his three-year tenure. The union is lobbying lawmakers to ensure
that the 7,000 employees will keep their jobs

Hwang was appointed in July by the government to take over the
chairmanship of Taiwan Power Co (Taipower), leaving the Taiwan Tobacco
office to Ray Dawn.

Dawn, 47, is a former director of Kaohsiung City's Bureau of Finance.
After assuming the chairmanship of Taiwan Tobacco, he has requested a
revaluation of the company's assets, facilities and factories, and has
been pushing organizational restructuring.

As soon as the privatization proposal is approved by the Cabinet, the
company will hire a financial consultant to assess its share-sale
project, he said.

Minister of Finance Lin Chuan said in an interview on Monday that "the
privatization of Taiwan Tobacco must not drag on for too long. We hope
the company can submit its new proposal as soon as possible."