Thu, Oct 03, 2019 - Page 12 News List

APT shareholders approve capital cut, new offering

By Lisa Wang  /  Staff reporter

Asia Pacific Telecom Co (APT, 亞太電信), a unit of Hon Hai Precision Industry Co (鴻海精密), yesterday said that shareholders have approved plans for a 34 percent capital reduction and a 1.5 billion new share offering to strengthen its financial structure and finance its bid for 5G spectrum.

The company reported accumulated losses of NT$22.15 billion (US$713 million) as of June 30, more than half of its total share capital of NT$42.98 billion, according to the shareholders’ meeting brochure.

APT shareholders voted “yes” to the proposal to cancel NT$14.81 billion of shares as part of the company’s broader efforts to manage losses.

The company attributed the losses to cutthroat price competition for 4G services and NT$103.36 billion in 3G telecom equipment impairment charges.

“Price competition intensified after the commercial launch of 4G, causing a setback in revenue and profit for the whole industry,” APT said in the brochure.

The heated competition also dashed APT’s hope to turn a profit when its customer base grew to 2 million this year, APT chairman Lu Fang-ming (呂芳銘) told shareholders.

Despite the losses, Lu reiterated the telecom’s determination to vie for a 5G spectrum during the first round of the auction in December.

APT and its local peers all have a chance to offer 5G services as they will be allowed to share spectrum — unlike for 3G and 4G — because of limited 5G bandwidth.

As of yesterday, all five local telecom operators in Taiwan had submitted their applications to participate in the auction before the deadline today.

APT is scheduled to set a price for the new share offering, which is to be made via a private placement, early next month, the company said.

The company’s top three shareholders — Hon Hai, Taiwan Railways Administration and Taiwan Mobile Co (台灣大哥大) — are among the potential subscribers for the new shares.

APT declined to reveal if any company has shown an interest to inject capital into the firm.

Hon Hai is its biggest shareholder at 19.63 percent.

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