Nanya Technology Corp (南亞科技), the nation’s largest DRAM chipmaker, yesterday said its board had approved a proposal to slash capital by 90 percent to improve financial structure.
The company plans to axe NT$215.65 billion (US$7.11 billion) by canceling 21.565 billion shares, to leave capital at NT$23.96 billion, the company said in a statement.
“The reduced share capital will be the optimal size for the company,” company spokesman Lee Pei-ing (李培瑛) told a media briefing. “That will enhance the company’s financial health.”
The reduction will help shrink the firm’s accumulated losses to NT$17.43 billion from NT$233.08 billion, Lee said.
The company purports to write off the accumulated losses within two years, he said.
As a result, Nanya’s net value will improve to more than NT$5 per share, a requirement for margin trading, compared with NT$0.41 per share at the end of last year, Lee said.
In that case, Nanya will be released from a ban on cash trading by the end of this year, he added.
The board yesterday also approved a plan to sell an 8-inch wafer plant and other assets owned by fully owned subsidiary Sumpro Electronics Corp (勝普) to Vanguard International Semiconductor Corp (世界先進) for NT$2.18 billion.
“The deal will have a positive impact on Nanya’s long-term development. The firm will be able to focus its resources on developing niche memory chips,” Lee said.
Lee expects Nanya to book about NT$600 million, or a NT$700 million loss, from the sale for the chipmaker’s first-quarter financial statement.
The deal will help Vanguard “obtain capacity advantages, capture business opportunities and reinforce growth momentum,” Vanguard chairman Chang Ching-chu (章青駒) said in a statement.
Unlisted Sumpro makes chips for power management devices and DRAM chips. It has a monthly capacity of 40,000 wafers.
No job cuts will occur as a result of the deal, Lee said.
Sumpro hires 800 employees. The deal is scheduled to be completed in July and the two proposals will be discussed during a shareholders’ meeting on June 6.