Silicon Integrated Systems Inc (SiS, 矽統科技) yesterday announced that its board approved initiating a capital reduction scheme to offset operating losses.
The Hsinchu-based IC design firm said that it plans to cut its capitalization by 8.72 percent, or NT$534.72 million (US$16.443 million), to NT$5.6 billion, the company said at a briefing at the Taiwan Stock Exchange in Taipei.
SiS said that the plan, which is to remove 53,472,499 shares from circulation, would be presented to shareholders at its annual general meeting on June 21.
The company said the deal might be completed before the end of the fourth quarter, pending approval by shareholders and regulators.
Following the capital reduction, SiS would see its net value per share improve to NT$12.69 from NT$11.58 at the end of last year, it said.
SiS shares closed at NT$7.41 on the local bourse yesterday, down 1.08 percent from the previous session. They have declined 13.76 percent over the past 12 months, stock exchange data showed.
SiS chairman Louis Chien (簡誠謙) said that despite suppressed share prices, the company’s financial situation remains sound.
However, financial statements show that the company had a string of quarterly losses in the first three quarters of last year and over the preceding three years.
“A turnaround is in sight for the company,” Chien said, adding that after selling off a venture it started with Sunplus Technology Co (凌陽科技) late last year and booking losses of NT$200 million, the company had posted net income of NT$10.26 million, or NT$0.02 per share, for last year.
Chien said that as of the end of the third quarter last year, the company held a cash position of NT$1.3 billion, while due to successive operating losses, it was unable to initiate stock buybacks due to regulatory guidelines.
He said the company might carry out a share buyback program in the future as earnings continue improving.
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