Tue, Dec 25, 2012 - Page 14 News List

Formosa Plastics to sell shares of other FPG unit

SELLING FRENZY:Formosa Plastics is the second of the Formosa Plastics Group’s units to say it plans to offload Formosa Petrochemical share to strengthen its capital

By Kevin Chen  /  Staff reporter

Formosa Plastics Corp (台塑), the nation’s largest maker of polyvinyl chloride and the flagship company of the Formosa Plastics Group (FPG, 台塑集團), yesterday said it planned to sell 190.52 million shares of Formosa Petrochemical Corp (台塑石化) by the end of the second quarter next year.

Formosa Plastics’ announcement, made in a filing to the Taiwan Stock Exchange, makes it the second unit under the nation’s biggest diversified industrial group, FPG, to say it is planning to sell Formosa Petrochemical shares.

On Friday, Formosa Chemicals & Fibre Corp (台灣化纖), which produces aromatics and styrenics, said its board had approved a managerial proposal to sell 190.52 million Formosa Petrochemical shares by June 30 next year.

Both Formosa Plastics and Formosa Chemicals said in their filings that they planned to use the proceeds from the sales to strengthen their working capital.

The two companies did not specify the pricing details of the planned sale, but Formosa Plastics shares ended 0.36 percent lower at NT$84 on the Taiwan Stock Exchange yesterday.

So far this year, Formosa Petrochemical, the nation’s only listed oil refiner, has declined 10.45 percent compared with a rise of 6.55 percent in the benchmark TAIEX.

Both Formosa Plastics and Formosa Chemicals also did not elaborate on who is interested in buying the shares, saying only that they were inclined to negotiate with prospective investors over the sale.

Nan Ya Plastics Corp (南亞塑膠), the nation’s largest plastics maker and also a FPG unit, is likely to follow suit by holding a board meeting sometime this week on a proposal to dispose of the same amount of Formosa Petrochemical before June 30, media reported yesterday, citing company sources.

Formosa Plastics, Formosa Chemicals and Nan Ya Plastics are the three largest shareholders in Formosa Petrochemicals. Based on Formosa Petrochemicals’ closing share price of NT$84 yesterday, the three are expected to raise up to NT$48 billion (US$1.63 billion) in fresh funds if they sell 571.56 million shares in Formosa Petrochemical.

FPG may use part of the share sale proceeds to fund its several overseas expansion projects — which include a steel mill in the Vung Ang Economic Zone in Vietnam, a petrochemical complex in the Chinese city of Ningbo and chemical plants in Texas, the Chinese-language Economic Daily News reported on Sunday.

The paper added that expanding these three projects would cost more than NT$300 billion and the group planned to raise some of the funds neede by selling Formosa Petrochemical shares.

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