The National Development Fund is to invest in a new solar energy company as part of the government’s promotion of “green” energy, sources close to the deal said.
The sources said the fund, which focuses on seed, start-up, restructuring, and merger and acquisition investments to speed up the pace of industrial development in the nation, has decided to take a stake in a new company to be formed by three local solar energy firms — Neo Solar Power Corp (新日光能源), Gintech Energy Corp (昱晶能源) and Solartech Energy Corp (昇陽光電).
The decision was made at a meeting held on Wednesday last week during which the fund studied the possibility of investing in the new solar firm, although the amount to be invested and other details have yet to be determined, the sources said.
In October, Neo Solar Power, Gintech Energy and Solartech Energy announced a merger, which would be the largest deal of its kind in the nation’s solar energy industry if it goes ahead.
The merger would create a company with NT$21.1 billion (US$706.7 million) in capital and is expected to burnish the nation’s competitiveness in the global solar energy market, the three companies said.
Under the agreement, one Gintech Energy share is to be swapped for 1.39 Neo Solar shares, while one Solartech Energy share is to be exchanged for 1.17 Neo Solar shares.
The deal is expected to be completed in the third quarter of the year and the company is to be called United Renewable Energy Co (聯合再生能源).
The new company is trying to solicit government funds at a time when the government is promoting the “five plus two” innovative industries, including renewable energy businesses, Neo Solar chairman Sam Hong (洪傳獻) said.
Before the sources indicated that the National Development Fund had decided to invest in the new company, local media reported that the fund was expected to inject between NT$4.5 billion and NT$5 billion.
The reports also said the Ministry of Economic Affairs is eyeing a seat on the new company’s board of directors to demonstrate the government’s support for renewable energy development.
The sources said the Cabinet set up a NT$100 billion fund through the National Development Fund last year in a bid to help local industries upgrade and the investment would come from that fund.
However, doubts have arisen over the investment as the three companies are all unprofitable.
In the first nine months of last year, Neo Solar, Gintech Energy and Solartech Energy incurred losses per share of NT$3.51, NT$2.20 and NT$2.07 respectively.
The National Development Fund is also the largest single shareholder in Taiwan Semiconductor Manufacturing Co (台積電), the world’s largest contract chipmaker.
‘BIG LOSS’: This year might see the last generation of Huawei’s Kirin chips, as their production would stop next month because they are made using US technology Chinese tech giant Huawei Technologies Co (華為) is running out of processor chips to make smartphones due to US sanctions and would be forced to stop production of its own most advanced chips, a company executive has said, in a sign of growing damage to Huawei’s business from US pressure. Huawei, one of the biggest producers of smartphones and network equipment, is at the center of US-Chinese tension over technology and security. Washington last year cut off Huawei’s access to US components and technology, and those penalties were tightened in May, when the White House barred vendors worldwide from using US
CORPORATE SCANDAL: Cathay Life has invested NT$13.3 billion in Bank Mayapada since 2015, but the latest loss of NT$8.8 billion has completely written off its investment Cathay Life Insurance Co (國泰人壽) yesterday said it would recognize an investment loss of NT$8.8 billion (US$298.1 million) in Indonesia’s Bank Mayapada Internasional Tbk PT due to concerns about the lender’s operations amid a corporate scandal. The company said it would revise its earnings result for June, from a net profit of NT$6.52 billion to a net loss of NT$520 million, its first monthly loss over the past 17 months. After booking an investment loss of NT$5.2 billion in Bank Mayapada earlier this year, Cathay Life has so far recognized total investment losses of NT$14 billion in the lender, executive vice president
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday reported that revenue last month expanded 25 percent annually, but fell 12.8 percent month-on-month to NT$105.96 billion (US$3.59 billion). In the first seven months of this year, the chipmaker’s revenue surged 33.6 percent to NT$727.26 billion, compared with NT$544.46 billion a year earlier. TSMC has said it aims to grow its revenue by more than 20 percent this year. The company has since May 15 stopped taking new orders from Huawei Technologies Co (華為), its second-biggest customer after Apple Inc, due to the US’ restrictions on exports containing US technologies. TSMC has no plans to
The US stock market has been on a tear, yet the country’s economy is in the dumps. So why do so many people believe — undoubtedly incorrectly — that the stock market has decoupled from reality? The economy many people experience, while bleak, is local, personal and, for the most part, either not publicly traded or plays only a small part in the stock market’s moves. To explain why these personal experiences have so little effect on equity markets, we must look more closely at the market role of the weakest industry sectors. The surprising conclusion: The most visible and economically vulnerable