Taiwan’s debt-ridden rail company Taiwan High-Speed Rail Corporation (THSRC) has secured a syndicated loan of NT$382bn ($12bn).

The loan will be used to pay off existing loans obtained by THSRC at a higher interest during the railway’s construction and is expected to save the company about $2bn per year.

The syndicated loan, which is the country’s largest ever, has been issued by a consortium of eight government-owned or run banks led by Taiwan Financial Holding and the government has guaranteed NT$308bn ($9.7bn).

The privately-held THSRC built the 345km high-speed railway linking Taipei in the north with Kaohsiung in the south using Japanese bullet-train technology and operated the line under a build-operate-transfer contract with the government.

Three years after the railway entered operation in January 2007 the company incurred a loss of NT$70.2bn ($2.1bn), about 66% of its paid-in capital, and total debts of NT$400bn ($12.6bn).