Financially strapped touchpanel maker Wintek Corp (勝華) yesterday said it has obtained an extension for the repayment of bank loans due later this month and is seeking new capital injection to fund its operations, but reassured investors that the company remains operational.
Wintek is also planning to revitalize some under-utilized assets to boost its cash holdings and proposes to cut costs by streamlining operations and boosting manufacturing efficiency, statements submitted to the Taiwan Stock Exchange show.
“Wintek will endeavor to execute its restructuring plan to improve its operational performance and reduce operational expenses,” company spokesman Jay Huang (黃忠傑) said in a statement.
Wintek made the comments after the Chinese-language Next Magazine yesterday said the firm had run into operational difficulties over a credit crunch. The report said some of Wintek’s suppliers complained about delayed payments.
Wintek did not deny the report, saying it is negotiating with raw material suppliers to process payments at a later date.
Over the first eight months of the year, the Greater Taichung-based firm repaid NT$1.24 billion (US$41 million) in long-term debt and slashed short-term debt by NT$3.91 billion, it said in a statement
For now, Wintek has NT$5.01 billion in cash and cash equivalence, but has to pay back NT$17.77 billion in short-term debt and NT$9.44 billion of debt within a year.
Wintek has lost NT$15.03 billion over the past three years and shed a further NT$3.42 billion in the first half of this year.
Locke Chang (張小彪), an industry analyst with TrendForce Corp (集邦科技), said that small-scale touchpanel makers like Wintek are facing growing pressure to survive against Chinese rivals, which he said “have cut prices to below cost levels to secure orders.”
Prices of touchpanel modules for handsets are expected to drop 15 percent year-on-year to US$1 per inch this year, while prices of one-glass-solution touchpanel modules for notebooks are to plunge about 20 percent year-on-year to about US$1.60 per unit, NPD DisplaySearch has predicted.
The prices for both have more than halved in the first half of this year from a year ago, the researcher said.
Wintek is also facing competition from LCD panel makers entering the touchpanel market offering one-stop shopping services and cost-effective touchpanels, Chang said.
Wintek shares fell 6.96 percent to NT$8.15 yesterday in Taipei.
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