Debt-ridden LCD panel maker Chunghwa Picture Tubes Co (CPT, 中華映管) yesterday said it is negotiating with key component and material suppliers as it works to restore operations under a restructuring scheme.
The 47-year-old company was forced to shut down its two fabs in Taoyuan’s Longtan (龍潭) and Yangmei (楊梅) districts over the weekend, as suppliers withheld materials for fear of not being paid.
The company on Friday said it submitted a restructuring plan to Taoyuan District Court as it could no longer pay its debts.
“Since then, we have started negotiating with suppliers to continue receiving materials,” an investor relations and public communications department official said by telephone.
“We do not yet have a time frame for resuming fab operations,” the official said. “We will resume production and shipments to clients soon, after wrapping up the negotiations.”
The restructuring filing provides the company protection from its creditors as it develops a plan and negotiates adjusting its debts.
The company lapsed into deep financial woes as LCD panel prices collapsed amid a severe supply glut and slumping demand due to US-China trade tensions and stock routs in China, company president Lin Sheng-chang (林盛昌) told employees in an internal letter.
The company’s board of directors last week approved the restructuring scheme and the panel maker has been in active talks with clients and primary material suppliers over the past few days, Lin said, calling on workers to band together and support the plan.
Operations are being streamlined and the firm is searching for ways to increase cash flow, in hopes of reviving the company, he added.
The company posted a net cash outflow of NT$8.16 billion (US$264.33 million) in the first three quarters of this year, reversing a net cash inflow of NT$4.57 billion for the same period last year.
It saw revenue dip to a historical low of NT$1.36 billion last month, down 55.49 percent from NT$3.05 billion a year earlier. Aggregate revenue plunged 28 percent to NT$23.08 billion in the first 11 months of this year, from NT$32.04 billion in the same period last year.
Chunghwa Picture Tubes has 4,583 employees and 244,931 shareholders, its annual report showed.
The company saw its share price tumble 9.4 percent to NT$1.06 in Taipei trading yesterday, two days after the restructuring announcement.
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