Analysis: BenQ move sparks optimism and anger

Taiwan Ratings Corp (中華信評), a local arm of Standard and Poor's, said there had been no immediate impact on BenQ's corporate ratings after the planned legal action in Germany. The company's `twBB+' long-term and `twB' short-term credit ratings will remain intact, Taiwan Ratings said in a statement yesterday.

BenQ said the firm would continue to sell BenQ-Siemens brand cellular phones, but would divert its focus back to its familiar Asian markets. With the German handset operation possibly under receivership in the final quarter, the company expected the fourth-quarterly loss would improve significantly as the firm would not have to cope with a massive loss from BenQ Mobile.

"BenQ will go back to its previous operation pattern, in terms of balance sheet, [after fixing BenQ Mobile through legal action]," said financial executive Eric Yu (游克用).

Though BenQ would stop booking huge losses soon, the company would face many challenges in operating its own-brand business, Yuanta Pacific Securities' Wang said.

Wang said he was concerned about whether BenQ would have the right to sell phones under the BenQ-Siemens brand name as it claimed without breaking the takeover agreements with Siemens.

Besides, unions representing 3,000 workers in Germany could hold large-scale protests against any possible closure of factories after the court's receivership, Wang said.

According to BenQ, some 1,400 employees in Munich as well as 1,600 at the Bocholt and Kamp-Lintfort sites in North-Rhine-Westphalia would be affected by the insolvency protection action and protests were held yesterday.