Cash-strapped Far Eastern Air Transport Corp (FAT, 遠東航空) could finalize its NT$5 billion (US$164.3 million) recapitalization plan as early as next week if the board of Kinmen Kaoliang Liquor Inc (金酒公司) agrees to inject NT$2.2 billion, or NT$1 per share, for a fully-diluted 40 percent controlling stake, executives of both companies said yesterday.
However, the liquor company, which is owned by the county government, laid out two deal-breakers: if it failed to secure either a controlling stake or rights to appoint new management at FAT, including its chairman, president and chief financial officer, Kinmen Liquor chairwoman Joanna Lei (雷倩) said yesterday in a telephone interview.
“FAT has long been an underfunded company, but its financial crisis could be solved immediately with our proposed capital injection,” Lei said, adding that the company had conducted a risk assessment before Thursday’s board meeting.
The deal is still pending final approval from the Kinmen County Council, which is slated to review the liquor company’s financial assessment reports early next week before voting on the local government’s reinvestment plan next Thursday.
Kinmen Liquor’s reinvestment proposal aims to keep FAT flights between Taipei and the outlying island from being discontinued to prevent transportation problems for Kinmen residents.
Extending the airline’s warmest welcome, FAT spokesman Hanson Chang (張有朋) yesterday said the company was grateful for the capital injection plan proposed by Kinmen Liquor, which in late February became the first company to express willingness to bail the airliner out of debt.
“We look forward to facilitating the recapitalization deal,” he said.
However, Chang said Kinmen Liquor was not the only interested suitor, since several other firms, including foreign investors, had expressed an interest in taking up a controlling stake in the carrier.
“We will carefully coordinate among potential investors to complete the private replacement deal,” he said.
The likelihood of a foreign investor taking up a controlling stake on its own appears slim, as local regulations limit foreign investors to stakes of less than 25 percent in local airliners, while no more than 49 percent of a local airline’s shares can be sold to foreign investors.
Chang said Far Eastern Group (遠東集團) chairman Douglas Hsu (徐旭東) had also expressed an interest in a 15 percent stake in FAT after dilution.
Far Eastern Group, the biggest shareholder in FAT with a 15.22 percent stake, may have to spend another NT$300 million to remain a shareholder with a diluted 15 percent stake.
A market insider speaking on condition of anonymity yesterday lauded the airline’s success in attracting new capital, but said that there was some risk involved for potential investors, as the airline had not disclosed all the details of its financial situation or the size of its debts.
The airline is also planning to reduce capital soon after its recapitalization has been completed, which may cut the value of Kinmen Liquor’s reinvestment from NT$2.2 billion to around NT$1 billion immediately, the source said, urging the airline to beef up its future competitiveness and profitability.
RECYCLE: Taiwan would aid manufacturers in refining rare earths from discarded appliances, which would fit the nation’s circular economy goals, minister Kung said Taiwan would work with the US and Japan on a proposed cooperation initiative in response to Beijing’s newly announced rare earth export curbs, Minister of Economic Affairs Kung Ming-hsin (龔明鑫) said yesterday. China last week announced new restrictions requiring companies to obtain export licenses if their products contain more than 0.1 percent of Chinese-origin rare earths by value. US Secretary of the Treasury Scott Bessent on Wednesday responded by saying that Beijing was “unreliable” in its rare earths exports, adding that the US would “neither be commanded, nor controlled” by China, several media outlets reported. Japanese Minister of Finance Katsunobu Kato yesterday also
Taiwan’s rapidly aging population is fueling a sharp increase in homes occupied solely by elderly people, a trend that is reshaping the nation’s housing market and social fabric, real-estate brokers said yesterday. About 850,000 residences were occupied by elderly people in the first quarter, including 655,000 that housed only one resident, the Ministry of the Interior said. The figures have nearly doubled from a decade earlier, Great Home Realty Co (大家房屋) said, as people aged 65 and older now make up 20.8 percent of the population. “The so-called silver tsunami represents more than just a demographic shift — it could fundamentally redefine the
China Airlines Ltd (CAL, 中華航空) said it expects peak season effects in the fourth quarter to continue to boost demand for passenger flights and cargo services, after reporting its second-highest-ever September sales on Monday. The carrier said it posted NT$15.88 billion (US$517 million) in consolidated sales last month, trailing only September last year’s NT$16.01 billion. Last month, CAL generated NT$8.77 billion from its passenger flights and NT$5.37 billion from cargo services, it said. In the first nine months of this year, the carrier posted NT$154.93 billion in cumulative sales, up 2.62 percent from a year earlier, marking the second-highest level for the January-September
Businesses across the global semiconductor supply chain are bracing themselves for disruptions from an escalating trade war, after China imposed curbs on rare earth mineral exports and the US responded with additional tariffs and restrictions on software sales to the Asian nation. China’s restrictions, the most targeted move yet to limit supplies of rare earth materials, represent the first major attempt by Beijing to exercise long-arm jurisdiction over foreign companies to target the semiconductor industry, threatening to stall the chips powering the artificial intelligence (AI) boom. They prompted US President Donald Trump on Friday to announce that he would impose an additional
RSS