Taiwan’s government plans to sell a 40 per cent stake in the state-owned Land Bank in an initial public offering to raise T$40bn (US$1.2bn) for reconstruction efforts, following the island’s worst natural disaster in a decade.

The proposed stake sale, to be approved by the legislature, would provide some relief to Taipei’s increasingly stretched finances. The government was facing one of its biggest budget deficits in recent years even before devastated the island’s southern region in August.