Chailease Holding Co (中租控股), the nation’s top leasing services provider, yesterday issued a statement saying it has sufficient funds to maintain smooth operations after share prices plunged this week following China’s liquidity squeeze.
“Chailease International Finance Co (仲利國際), [a Shanghai-based subsidiary of Chailease Holding] has long enjoyed the support of Chinese financial institutions and has won promises of liquidity supply to meet demand,” Chailease Holding said in a statement.
The statement came after shares in Chailese tumbled by the daily 7 percent limit for most of the trading session yesterday and ended down 5.33 percent at 63.9 percent, weaker than the TAIEX’s 1.22 percent fall, Taiwan Stock Exchange data showed.
That added to a plunge of 24.09 percent over the past week, compared with a 4.34 percent decline for the main index, following reports of a liquidity crunch in China on Thursday last week.
“As of May 31, Chailese International obtained 13.5 billion yuan [US$2.2 billion] in liquidity from Chinese banks and has already lent out 7 billion yuan, or 51.8 percent,” meaning it has about another 6.5 billion yuan, the statement said.
Apart from that, the leasing company has been increasing its liquidity to meet business needs, the statement said, as state-owned China Development Bank (開發銀行), as well as the Industrial and Commercial Bank of China Ltd (中國工商銀行), have pledged to supply 10 billion yuan and 6 billion yuan respectively, by 2015.
A day earlier, Chailease Holding posted NT$2.37 billion in revenue last month, down 1.83 from April, but up 44.09 percent from the same period last year, the company said in a stock filing.
The company accumulated NT$2.54 billion in net income as of last month, representing NT$2.42 per share, an increase of 42.49 percent from the level a year ago, the filing indicated.