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.
SETBACK: Apple’s India iPhone push has been disrupted after Foxconn recalled hundreds of Chinese engineers, amid Beijing’s attempts to curb tech transfers Apple Inc assembly partner Hon Hai Precision Industry Co (鴻海精密), also known internationally as Foxconn Technology Group (富士康科技集團), has recalled about 300 Chinese engineers from a factory in India, the latest setback for the iPhone maker’s push to rapidly expand in the country. The extraction of Chinese workers from the factory of Yuzhan Technology (India) Private Ltd, a Hon Hai component unit, in southern Tamil Nadu state, is the second such move in a few months. The company has started flying in Taiwanese engineers to replace staff leaving, people familiar with the matter said, asking not to be named, as the
The prices of gasoline and diesel at domestic fuel stations are to rise NT$0.1 and NT$0.4 per liter this week respectively, after international crude oil prices rose last week, CPC Corp, Taiwan (台灣中油) and Formosa Petrochemical Corp (台塑石化) announced yesterday. Effective today, gasoline prices at CPC and Formosa stations are to rise to NT$27.3, NT$28.8 and NT$30.8 per liter for 92, 95 and 98-octane unleaded gasoline respectively, the companies said in separate statements. The price of premium diesel is to rise to NT$26.2 per liter at CPC stations and NT$26 at Formosa pumps, they said. The announcements came after international crude oil prices
DOLLAR SIGNS: The central bank rejected claims that the NT dollar had appreciated 10 percentage points more than the yen or the won against the greenback The New Taiwan dollar yesterday fell for a sixth day to its weakest level in three months, driven by equity-related outflows and reactions to an economics official’s exchange rate remarks. The NT dollar slid NT$0.197, or 0.65 percent, to close at NT$30.505 per US dollar, central bank data showed. The local currency has depreciated 1.97 percent so far this month, ranking as the weakest performer among Asian currencies. Dealers attributed the retreat to foreign investors wiring capital gains and dividends abroad after taking profit in local shares. They also pointed to reports that Washington might consider taking equity stakes in chipmakers, including Taiwan Semiconductor
A German company is putting used electric vehicle batteries to new use by stacking them into fridge-size units that homes and businesses can use to store their excess solar and wind energy. This week, the company Voltfang — which means “catching volts” — opened its first industrial site in Aachen, Germany, near the Belgian and Dutch borders. With about 100 staff, Voltfang says it is the biggest facility of its kind in Europe in the budding sector of refurbishing lithium-ion batteries. Its CEO David Oudsandji hopes it would help Europe’s biggest economy ween itself off fossil fuels and increasingly rely on climate-friendly renewables. While