Mon, Jan 16, 2012 - Page 12 News List

TPK drops its GDR sale plan on market volatility

ON HOLD:TPK said market fluctuations in Taiwan and abroad prompted the decision to revoke the sale, which had FSC approval, to protect shareholders and investors

By Kevin Chen  /  Staff Reporter

TPK Holding Co (宸鴻), a major supplier of touch modules for Apple Inc’s iPhone smartphones and iPad tablet computers, last week said it had decided to drop a planned sale of global depositary receipts (GDRs) because of recent market volatility.

In a statement issued on Thursday, TPK said it would revoke the approved applications to raise funds of between US$472 million and US$590 million through the GDR issue, which got the green light from the Financial Supervisory Commission (FSC) on Oct. 27 last year.

On Sept. 30 last year, TPK and one of its major shareholders, Balda AG, announced plans to issue between 23.6 million and 29.5 million in both existing and new common shares to back up the planned GDR sale.

At the time, TPK said it planned to use the proceeds to finance its subsidiaries to expand plants, acquire machinery and equipment, as well as meet the company’s future working capital requirements, according to the statement.

However, recent market fluctuations both at home and abroad have prompted the company to revoke the previously approved GDR issue applications in a bid to protect shareholders and investors, the company said.

“Because of the significant volatility of domestic and international financial markets resulting from the European debt crisis, the stock market is not performing well,” TPK said.

The company did not elaborate on when it would resume the GDR issue, only saying only that it did not expect any impact on its finances and business following the change.

Earlier last week, TPK reported better-than-expected fourth-quarter consolidated revenues totaling NT$45.48 billion (US$1.6 billion), up 13.6 percent quarter-on-quarter and 69.7 percent higher than a year earlier.

HSBC Securities (Taiwan) Corp attributed TPK’s fourth-quarter result to robust demand for the iPhone and market share gains made by the firm in touch panels.

However, the brokerage warned that higher iPhone exposure and rising price competition would also mean margin pressure for TPK in the first quarter of this year, despite the company’s effort to increase shipments of the higher-margin iPad.

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