The Tsann Kuen Group’s (燦坤) plan to merge its subsidiary Star Travel Corp (燦星旅遊) with cash-strapped Skylark Travel Service Co (天喜旅行社) has been abandoned, a company official said yesterday.
“The planned merger deal is formally off,” Shanon Hsieh (謝霈琪), the company’s public relations manager, told the Taipei Times yesterday.
Tsann Kuen announced on May 27 that Star Travel would merge its business operations with Skylark, with the former focusing on lower and middle-priced tour packages and the latter on higher-end customers.
At the time, the two companies said they might move toward an eventual merger, which would help the 19-year-old Skylark stay afloat after it bounced checks of between NT$6 million (US$184,000) and NT$8 million.
However, Skylark’s financial problems are more serious than Tsann Kuen had anticipated, Hsieh said. In addition, there were some disagreements regarding the merger terms between the two sides, she added.
EMPLOYEE SALARIES
According to a stock exchange filing issued last week, Tsann Kuen, which runs one of the nation’s leading home appliance and consumer electronics chains, said it had spent NT$299 million to address Skylark’s immediate cash flow problems, employee salaries for April and last month, and travel insurance premiums needed for the resumption of operations.
“That [figure] is where our stop-loss point is ... We really cannot spend more than that level and not cause damage to the interests of our own shareholders,” said Hsieh, who did not want to elaborate on how much debt Skylark has.
Another industry veteran told the Taipei Times last night that Skylark has debts considerably higher than NT$500 million.
The source, who preferred to remain anonymous, said the failure of the deal could also be attributed to clashes between the two companies over the past month in terms of corporate culture and business management.
“While Tsann Kuen had said it would retain Skylark’s brand name and keep its management team intact, there seems to have been problems. For example, Skylark employees only listened to chairman David Kuo (郭正利), not the new boss,” he said.
Calls to Kuo were not answered last night.
The Tourism Bureau said yesterday it had received an application from Skylark to temporarily suspend its services again. On May 25, the travel agency was ordered by the bureau to stop operations because of its financial problems, but it later resumed operations with financial assistance from Tsann Kuen.
LEGAL ISSUES
Chen Mei-hsiu (陳美秀), chief of the bureau’s hotel, travel and training division, said at this point Skylark could still organize tours because it has no legal issues with the bureau.
Skylark has 154 customers scheduled to travel in the next month, but the company has not charged any of them yet. The firm plans to transfer these clients to its affiliate La Deluxe Travel (喜達旅行社), Chen said.
ADDITIONAL REPORTING BY SHELLEY SHAN
RSS