Local television and PC monitor maker Jean Co (新美齊) yesterday again faced pressure to delist from the main bourse after the stock exchange regulator said its planned sale of TV and monitor assets would undermine its operation.
In March, Jean Co inked an agreement with Chinese flat-panel maker BOE Technology Group Co (京東方) to sell its TV and PC monitor manufacturing facilities and equipment in Suzhou and Taiwan for 290 million yuan (US$9.07 million).
The Taiwanese company said at the time that the sale was part of a strategic shift from the low-margin and highly competitive TV and monitor market to higher-margin businesses, such as selling brand and niche products.
“We found that Jean Co generates all of its revenues from its Chinese subsidiary,” said a Taiwan Stock Exchange Corp (TWSE) official, who is in charge of the matter. “We are seriously concerned that the sale will greatly impact the company’s operation.”
Local firms are required to delist from the local exchange after sales of assets that contribute half of their revenues, he said.
To protect investors’ interest, the company’s shares will be removed from trading on the nation’s main bourse after the transaction of asset sales is closed, the official said, adding that the TWSE had received calls from investors asking about this issue.
While Jean Co said BOE had agreed to the company’s proposal to gradually transit its contract customer orders over three years, the official said the TWSE was doubtful that this was feasible, saying the company over-optimistic about the proposed market shift.
The transaction was originally set for June 1 and could resume anytime as the Investment Commission approved BOE’s proposal on July 29 to set up a local subsidiary to operate home appliances and computer businesses.
Jean Co said it was planning to submit a second proposal to the TWSE to keep its shares trading after the regulator rejected its first proposal filed in May.
A panic sell-off yesterday sent the company’s stock down to its 7 percent daily limit at NT$11.30.
The company lost NT$25 million in the second quarter, compared with a net profit of NT$129 million in the same period last year, according to a stock exchange filing last month.
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