Epistar Corp’s (晶電) board of directors has approved plans to spin off its semiconductor foundry business into a separate wholly owned entity, the LED chip manufacturer said yesterday.
Epistar said that the new unit, which has yet to be named, would be allocated enterprise value of about NT$1 billion (US$32.89 million) from its parent.
Epistar would gain 100 million shares in the new unit issued at a premium of NT$10 per share and a par value of NT$5 per share, it said in a filing with the Taiwan Stock Exchange.
As the amount of shares to be gained has the same value as the new unit, its earnings per share and net asset value per share performance would not be affected by the spin-off, it said.
While key personnel changes would take effect on July 16, the plan is scheduled to be implemented on Oct. 1.
Epistar president M.J. Chou (周銘俊) is to step down to take over as president of the new unit, but will retain his seat on the Epistar board, while he will be replaced by vice president of sales and marketing Patrick Fan (范進雍), the company said.
The new foundry unit would focus on contract manufacturing of vertical-cavity surface-emitting lasers and gallium nitride chips, in a bid to diversify from the LED market, where Epistar has been facing stiff competition from Chinese rivals.
Epistar’s foundry unit has contributed annual sales of about NT$100 million to NT$200 million from the manufacturing of data communication chips, Chou said.
The new unit has begun negotiations with prospective customers, it is expected to ship out samples of 3D sensing chips in the final quarter of this year and report modest earnings before the end of next year, Chou said.
Epistar shareholders on Thursday approved the distribution of a cash dividend of NT$0.11 per common share by allocating the company’s capital surplus.
Sales in the first five months fell 14.89 percent annually to NT$8.63 billion, with sales last month dipping 18.07 percent from April to NT$1.81 billion.
Epistar shares yesterday gained 0.78 percent in Taipei trading to close at NT$39.
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