Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday said it has sold 24.17 million of its shares in Motech Industries Inc (茂迪) over the past four months, a move it said is meant to contain losses from its investment in the struggling solar cell producer.
TSMC’s shareholding in Motech dropped to 6.31 percent as of yesterday, compared with 10.77 percent on April 30.
In 2010, TSMC acquired a 20 percent stake in Motech, the nation’s biggest solar cell maker, for NT$6.23 billion (US$202.73 million) via a private placement.
In 2015, the chipmaker began unloading its shares in the company.
FINANCIAL MOTIVES
“The company will gradually and orderly sell Motech shares, as they are a financial investment,” TSMC said in a filing with the Taiwan Stock Exchange at the time.
From May to last month, TSMC sold 24.17 million shares of Motech for NT$325 million, or NT$13.44 per share, the company said in a filing with the exchange.
Motech was priced at NT$82.7 per share eight years ago, but closed at NT$11.15 yesterday, after tumbling 50.33 percent this year.
TSMC, the world’s biggest contract chipmaker, said that the share sale eroded NT$434 million from its reserved profits.
Motech has paid-in capital of NT$5.41 billion. The company posted a second-quarter net loss of NT$2.07 billion, or losses per share of NT$3.85.
WIDENING LOSSES
In the first half of the year, cumulative losses widened to NT$3.14 billion, or NT$5.84 per share, compared with losses of NT$1.7 billion in the same period last year.
The company has been in the red since 2014.
Gross margin was minus-13.43 percent in the first six months, while operating margin was minus-22.2 percent, company data showed.
Amid falling prices and rising competition from Chinese rivals, Motech saw its revenue drop 17.42 percent to NT$10.45 billion in the first seven months, from NT$12.65 billion in the same period last year.
Former chairman Chang Ping-heng (張秉衡) resigned from his position and from the company’s board last month, citing career reasons, and the company’s board of directors elected Steve Tseng (曾永輝), a founding shareholder, as his replacement.
At the end of April, United Microelectronics Corp (聯電) held a 4.34 percent stake in Motech. The company did not provide updated information about its holdings.
TSMC shares fell 2.85 percent to close at NT$256 yesterday, after hitting a seven-month high of NT$268 on Thursday.
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