Sat, Jun 14, 2008 - Page 12 News List

FAT asks for more time, plans private equity share sale

NO NEW CASH The firm has raised none of the US$100 million it needs to maintain its short term operations and owes its employees unpaid salaries

By Jerry Lin  /  STAFF REPORTER

The financially troubled Far Eastern Air Transport Corp (FAT, 遠東航空) said yesterday that no capital had been injected into the airline and urged the government to postpone freezing its rights to operate international air routes.

FAT said it hoped to attract capital of NT$5 billion through a private equity offering of 5 billion shares by lowering its share price from NT$3.17 per share to NT$1 per share.

The company cannot, however, lower its share price unless the plan is passed by shareholders on June 30.

FAT said it would focus in the meantime on retaining its international air routes.

The government has warned it would take away FAT’s rights to operate international flights if the airline fails to resolve its financial problems before Monday,

“Investors are hesitant at the moment because our share price is still too high ... If investors wait until June 30, that means they will be able to obtain three times as many shares [at one-third of the price],” FAT spokesman Yute Lee (李有德), said yesterday by telephone.

Lee said that a representative of FAT shareholder Chia Wen-chung (賈文中) told a meeting held on Monday by the Civil Aeronautics Administration that Chia would acquire more shares once the airline’s share price had dropped to NT$1 per share.

Apart from Chia, no other shareholders expressed an interest in increasing their investment, Lee said.

In the short term, FAT needs capital of at least US$100 million to maintain its operation, Lee said.

FAT currently owes its employees 1.9 months of unpaid salaries.

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