Taiwan Ministry of Transportation and Communications (MOTC) signed an amendment to its contract for the plan to restructure the finances of the Taiwan High Speed Rail Corp (THSRC) that was made official.
The amendment was proposed to save the debt-ridden high speed rail operator from imminent bankruptcy, as it faced multiple lawsuits filed by preferred stockholders who were threatening to redeem the stock, which was valued at approximately NT$54 billion (USD 1.71 billion).
The company has less than NT$2 billion (USD 63.4 million) of funds available.
Apart from resolving the THSRC’s financial problems, the amendment of the contract also means the end of the build-operate-transfer model under which the company had operated, as the government has become the largest shareholder in the company.
The company also terminated its contract with the MOTC to develop properties surrounding the high-speed rail stations yesterday, with the right of property development being returned to the government.
MOTC Minister Chen Jian-yu said the amended contract tackled the financial problems of the THSRC in a “very practical manner.” He called on investors to support the financial restructuring plan, saying that they should believe in the THSRC as well as in the government. THSRC Chairman Victor Liu said the company is now owned by the state and operated by a private contractor following the amendment of the contract.