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Taiwan to sell Land Bank stake, debt for typhoon fund

Taiwan aims to raise at least NT$39.6 billion (US$1.2 billion) selling a 40 percent stake in Land Bank of Taiwan in an initial public offering to help fund reconstruction after the deadliest storm in 50 years.
The government will also sell debt to finance the relief effort, deputy Finance Minister William Tseng said in a telephone interview yesterday. Land Bank, based in Taipei and wholly state-owned, had net assets of NT$99 billion on Dec. 31, he said.
Typhoon Morakot dumped record rainfall on Taiwan from Aug. 6 to Aug. 9, killing 461 people and leaving 192 missing. The cabinet, facing criticism that it responded too slowly to the storm, on Aug. 20 approved plans for a three-year, NT$100 billion budget for reconstruction.
"The government didn't want to fully rely on selling bonds to fund the relief budget as it will push up the debt level, so it is selling a stake in Land Bank," Tseng said.
Taiwan has forecast a 2010 budget deficit of NT$187.8 billion after cutting taxes to help stimulate the economy. In the budget proposal, the government plans to sell NT$466 billion of bonds next year. The ministry expects to complete a listing plan for Land Bank within two months and submit the proposal to legislature for approval, Tseng said.
Land Bank, set up by the government in 1946, offers housing and consumer loans, wealth management services, and markets trust funds. It also takes deposits and has a securities brokerage business.
Finance Minister Lee Sush-der Tuesday announced the proposed sale of the state-controlled bank, without giving a value.
The government doesn't plan to sell other assets to fund the reconstruction budget, Tseng said.
The sale of Land Bank isn't part of plans to privatize state-owned assets, Tseng said. As part of the privatization effort, the ministry plans to sell a 10 percent stake in Taiwan Financial Holdings Co., the island's largest financial-services company, in early 2010, he said. It will sell a stake in Taiwan Tobacco & Liquor Corp. later in the year, Tseng said.

Updated : 2021-07-28 16:30 GMT+08:00