Mosel Vitelic Inc (茂矽), parent of the nation's second-largest memory-chip manufacturer ProMOS Technologies Inc (茂德科技), managed to reduce a predicted 2003 loss of NT$8.3 billion by 45 percent to just NT$4.6 billion, the company told the TAIEX in a statement yesterday morning.
But the better-than-expected result does not mean that cash-strapped Mosel is out of the woods yet, as much of the improvement may have come from selling off assets in its core dynamic random access memory (DRAM) chip manufacturing business, analysts said.
"The reason that Mosel has revised its earnings/loss is that it sold its DRAM operating assets to ProMOS just before Christmas," said Alfred Ying (應宗傑), an analyst at BNP Paribas in Taipei. "Because of this Mosel booked a big profit."
Mosel's shares rose NT$0.13, or 6.1 percent, to close at NT$2.28 on the TAIEX following the announcement.
On Christmas Eve, Mosel spokeswoman Peng Chuo-lan (彭卓蘭) said the company planned to sell its DRAM business -- including 100 percent of US subsidiary United Memories Inc and 50 percent of Mosel Vitelic (US) Corp -- to ProMOS for US$120 million.
Before the sale of its DRAM assets, Mosel had seen a surge in DRAM sales, reporting memory chip revenue of NT$4.6 billion in October and November -- more than double the same two-month period a year earlier. Mosel is also selling more chips on behalf of ProMOS after its former partner, Germany's Infineon Technologies AG, pulled out of the joint venture last year over a dispute about who would control the chipmaker.
But with no manufacturing base, Mosel has lost its major revenue generator.
"Starting from the sale of its DRAM assets to ProMOS, Mosel's sales will not include DRAM chips and will therefore see a rapid decline," Ying said. "I'm still not very positive about Mosel's future. Its only option is to sell shares in ProMOS."
Another analyst was slightly more optimistic for the company's prospects this year, saying that its shares in ProMOS would ensure its survival.
"Mosel's problems are gradually being eased as it still has a lot of shares in ProMOS which they can continue to liquidate to create cash to repay its debts," said James Huang, (
Only last Friday, Mosel applied to sell 200 million shares in ProMOS to raise money to pay off its remaining debt. Mosel aims to hold just over 600 million shares in ProMOS after the sale, the statement said.
In the spring and summer of last year, Mosel had to apply to creditors to restructure almost NT$6 billion in overdue debt that it could not repay.
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