Taiwan High Speed Rail Corp’s (THSRC) (2633) convened a shareholders meeting Friday morning and the company warned that the concession period needs to be extended a great deal to ease the pressure on this heavily-indebted company to paying down liability over a longer period of time instead of a mere 20 years. Without capital reduction, company’s shareholders will be paid no dividend in the following 20 years.
“Even though a financial improvement plan will be proposed in August, the concession period has to be prolonged, as the company’s accumulated losses have reached NT$52 billion and it has to endure tremendous preferred shares buyback pressure. As such, the total loss will be up to NT$73.5 billion,” noted the THSRC’s chairman Tony Fan.
According to the contract, THSRC has to transfer the assets of high speed rail facilities to the government at the end of 2033. The near-bankrupted THSRC is racing into a high-speed crisis as it has been running without making a profit. Fan expressed hope that the government can step in to negotiate a favorable interest rate for the company for a huge amount of debt with banks to ease its financial burden.