ANDREW DOYLE / SINGAPORE
Plans for manufacturer's privatisation may be scrapped as three possible investors lose interest in the proposed deal
Taiwan's government may be forced to rethink plans to privatise Aerospace Industrial Development Corporation (AIDC). Three of the five potential investors - two banks and a government investment vehicle - appear to be losing enthusiasm for the deal.
Senior government officials and elements of AIDC's own management now favour selling AIDC piecemeal, but the proposal must be debated by Taiwanese lawmakers, says AIDC executive office director Michael Lee. "There is top-level agreement that we should separate [the divisions]," he says.
Aero engine and industrial turbine manufacturing, education and training, and IT could be first for any sell-off. It is unclear if overseas companies will be eligible to bid.
Taiwan's cabinet earlier this year passed a bill setting a strict December 2003 deadline for AIDC's privatisation. It listed five potential participants: Chiao Tung Bank, China Development Bank, the National Defence Industry Development Fund, the Yau Hua glass company and the China Aviation Development Foundation (CADF).
However, government-controlled CADF owns 71% of China Airlines and is preoccupied with restructuring the carrier following the fatal crash of a Boeing 747-200 on 25 May. It has pledged to sell 20-30% of the airline to a strategic investor.
Meanwhile, enthusiasm at the two banks is also waning, says Lee, leaving "two parties still interested". As a result it will be extremely difficult, if not impossible, to privatise AIDC by the end of 2003.
Previous attempts to sell AIDC have failed, forcing the company to abandon a risk-sharing role in the Airbus A380 due to a lack of capital. Most of its risk-sharing ventures, including cockpits for the Sikorsky S-92 helicopter, empennages for the Bombardier Challenger 300 business jet and wings for the Ibis Aerospace Ae270, are several years away from profitable production.
Source: Flight International
