Chunghwa Telecom kicks off IPO with auction of 3% stake

Chunghwa Telecom, Taiwan''s government-owned telecommunications company, starts first stage of IPO.

Chunghwa Telecom, Taiwan's biggest state-owned company, kicked off the first stage of its initial share sale on Wednesday with an auction aimed at determining the price at which the shares will be sold to the public.

The company is auctioning 3% of itself, or 289 million shares, with a base price of NT$104 ($3.23), says Steve Chen, a manager in the underwriting department of Chinatrust Commercial Bank, which is arranging the sale. The auction will run until August 19. The results will be announced August 25.

Chunghwa plans to sell 3.2 billion shares, or 33% of the company this year and an additional 33% in 2001, Chen says. The government plans to sell 1.25 billion shares, or 13% of the company, to the public next month.

An additional 482 million shares, or 5% of the company, will be reserved for Chunghwa employees, and a further 1.16 billion, or 12%, will be sold to overseas investors through a listing of American Depositary Receipts on the New York Stock Exchange at the end of this year, Chen says. The domestic shares are set to begin trading on the Taiwan Stock Exchange on October 5.

The sale, if successful, would be the biggest IPO in Asia excluding Japan and would net the government at least NT$300 billion ($9.59 billion).

The minimum number of shares that can be bought in the auction is 5,000. The minimum block in the public offer will be 2,000.

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