Local electronics manufacturer BenQ Corp (明基) is set to spin off its brand business in September in a bid to focus on its original design manufacturing (ODM) operations, company executives said yesterday.
After the spin off, BenQ will be renamed Jia Da Corp (
"It is easier to spin off the brand business from the company as it is less complex and is on a smaller scale than ODM," Lee said.
By returning to its ODM base, Jia Da will offer stronger capabilities than rivals by covering high-end products like handsets, printers and projectors, BenQ vice president Jerry Wang (王文燦) said.
The spun off brand unit will retain the BenQ Corp name and will be 100 percent owned by Jia Da.
There are also plans to attract strategic investors to the brand unit, which will have NT$3.6 billion (US$108 million) in capital, the company said.
Most of the company's current management will oversee both Jia Da and the spin off, with Lee assuming the chairmanship at both entities.
The spin off project was approved at a BenQ board meeting yesterday, but must be approved at a shareholders' meeting on June 15.
"The separation plan will definitely benefit BenQ's ODM business and further expand its ODM client base," said Tseng Hsin-kai (
Tseng said, however, that the effect of the spin off would be more visible only after the brand unit cuts its dependence on Jia Da to become a listed firm run by new management.
"The brand and ODM operations will still be sharing management and major resources after the spin off, which is not a clear-cut separation," he said.
BenQ also announced yesterday a 40 percent -- or NT$10.26 billion -- reduction in capital to NT$15.38 billion that is planned for September.
Following the reduction, its outstanding shares are expected to fall to 1.5 billion shares from 2.56 billion shares at present.
"The reduction will enable us to write off losses incurred last year by the mobile phone business, and increase our net value per share to NT$11.3," Lee said.
BenQ has been in the red since acquiring Siemens AG's unprofitable cellphone unit. The company said last September that it would stop funding the German mobile-phone subsidiary, which is being liquidated.
BenQ reported its sixth straight quarterly loss yesterday, with the first-quarter net loss narrowed to NT$1.76 billion, or NT$0.69 a share, compared with a loss of NT$5 billion, or NT$1.95 per share, a year earlier.
First-quarter revenue fell 57 percent to NT$24.95 billion from NT$57.94 billion a year earlier, the company said.
Its shares closed up 2.8 percent to NT$12.90 on the Taiwan Stock Exchange before the earnings were announced.
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