2006/8/1

By Yu-huay Sun Bloomberg

Taiwan High Speed Rail Corp. (THSRC) is to raise as much as NT$67.2 billion (US$2.05 billion) in loans and bond sales, as construction delays add to the cost of its project to build the island's fastest train service.

The rail operator yesterday signed a NT$40.7 billion loan with seven Taiwanese banks and it has hired Deutsche Bank AG to underwrite the overseas sale of US$200 million of bonds that can be converted into equity, Chairwoman Nita Ing said in Taipei. An international investment bank will help arrange another NT$20 billion of loans, she said, without elaboration.

The Taipei-based company is building a rail link between Taipei and Kaohsiung in the south of the island, which will cut traveling times for the 345 kilometer journey by two-thirds to 90 minutes. Construction problems have delayed the start of the 300 kilometer an hour (186 miles an hour) train service by a year to October, forcing up costs for the company, which has struggled to raise funds in the past. "The loan signed [today] forms the foundation of our company's new financing plan," Ing told reporters. Along with the other loan and bond sale, it is "enough to meet Taiwan High Speed's demand for capital," she said.

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Posted by pichu at August 1, 2006 8:41 AM