Local solar wafer maker Sino-American Silicon Products Inc (SAS, 中美晶) yesterday said its board had approved spinning off its LED sapphire substrate and analog chip businesses to create two new companies to boost operational efficiency.
The board also agreed to deliver NT$5 in cash dividends to shareholders based on last year’s net profits of NT$3.57 billion (US$123 million), or NT$10.5 per share, meaning a dividend yield of about 4 percent compared with the stock’s closing price of NT$120 on Wednesday.
Last year, the LED sapphire substrates and analog chip divisions accounted for 2 percent and 20 percent of Sino-American’s revenues of NT$22.53 billion.
“This is the biggest structural changes since the company’s inception in 1981,” said company chairman and chief executive Lu Ming-kuang (盧明光) said.
The separation would “facilitate the introduction of strategic partners and capital injection,” he said.
Sino-American planned to launch an initial public offering of the two business one year after the separation, Lu said. The spin-off is scheduled to be completed on Oct. 1, the company said.
Revenues of its LED sapphire substrates are expected to grow three-fold this year from last year’s NT$500 million, Lu said.
Sino-American said it would continue to invest in its solar wafer business. The company stuck to its plan to resume building up 600 megawatt of capacity this year.
The company said in a filing to the Taiwan Stock Exchange that it planned to invest NT$837 million in Sino-Solar (中陽光伏), a joint venture between Sino-American and local solar cell maker Solartech Energy Corp (昇陽光電).
Commenting on the second-quarter outlook, company president Doris Hsu (徐秀蘭) said prices for solar wafers would fall from the first quarter after some European governments cut subsidies.
Sino-American shares rallied 5.83 percent to NT$127 yesterday, while bigger rival Green Energy Technology Inc (綠能科技) advanced 3.25 percent to NT$127.
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