Wed, Oct 21, 2009 page11

• China Steel to sell shares it purchased late last year

  • By Kevin Chen / STAFF REPORTER
  • • 
    • 
    • 

  China Steel Corp (中鋼), Taiwan’s biggest steelmaker, is planning to sell shares it bought back late last year on the open market to its employees as part of measures to reward employees as business improves from the global economic downturn late last year, a company official said yesterday.

  The Kaohsiung-based company is considering distributing these shares to employees sometime next month, public relations official Hung Jui-bin (洪瑞彬) told the Taipei Times by telephone yesterday, confirming a report by the Chinese-language Apple Daily.

  “The management is still evaluating when is the most appropriate time to sell these buyback shares to our employees,” Hung said.

  China Steel’s plan to reward employees with repurchased shares as a type of bonus came after Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) chairman Morris Chang (張忠謀) announced on Saturday the company would give employees a half-month bonus next month because of good third-quarter performance.

  In July, TSMC offered employees a half-month salary as a bonus to reflect its strong second-quarter sales.

  China Steel conducted a share-repurchase program between Oct. 8 and Dec. 7 last year, buying back 108 million shares at NT$23.24 per share on average, the newspaper said.

  The company may sell these shares to employees at NT$23 per share, with the maximum amount of 10,000 shares per employee, the paper said.

  Hung declined to confirm the report about the price per share and the number of shares the company is going to sell to employees.

  However, as there will be no lockup up period on the shares employees purchase, employees will be able to make a profit if they sell these shares at market prices right away, he said. Some employees might opt to hold these shares as a long-term investment, however, he said.

  China Steel’s share prices ended at NT$30.2 per share on the Taiwan Stock Exchange yesterday. The stock has risen 30.74 percent so far this year, underperforming a rise of 68.88 percent on the benchmark TAIEX over the same period.

  Hung said the move — selling shares to employees — was unrelated to the company’s slow recovery in cash-flow generation, especially after Taiwan Ratings Corp (中華信評) last month lowered its credit ratings on China Steel on concerns of the steelmaker’s financial risk profile.

  “It’s true that the company is facing financing pressure because we need to fund the construction of two blast furnaces at our subsidiary, Dragon Steel Corp [中龍], in Taichung over the next two years,” Hung said.

  “But the planned share sale is a way to thank employees for their hard work at a time when many of them have had their pay cuts early this year,” he said.

  China Steel reported a loss of NT$18.62 billion (US$567.6 million) in the fourth quarter of last year, its first quarterly loss in its nearly 40-year history, and experienced another quarterly loss of NT$7.18 billion in the January-to-March period, before seeing the balance recover to a profit of NT$724.5 million in the April-to-June period.
• Most Popular

  • 1

    Bologna advance to face AC Milan in Coppa final

  • 2

    Taiwan ranked as the cheapest travel destination

  • 3

    Wolves hold off Lakers 116-104 to take series lead

  • 4

    Taiwan in Time: Taiwan’s first high school for Taiwanese students

  • 5

    Taiwan would benefit from integrated theater: expert