Solar cell maker Motech Industries Inc (茂迪) yesterday said that its board of directors has decided to cut capitalization by NT$1.85 billion (US$60.6 million) to create a more efficient capital structure.
The company plans to cancel 185.41 million shares, or 34.31 percent of those in circulation, as part of efforts to pare accumulated losses, Motech said in a filing with the Taiwan Stock Exchange.
The scheme would lower its capitalization to NT$3.55 billion, the filing said.
If shareholders approve the scheme at an annual general meeting on June 18, it would be presented for regulatory approval, it added.
“There is no effect on our liquidity and financial position; instead, through this action, the company will improve its cost structure,” Motech said in the filing.
Motech reported net losses of NT$1.32 billion for last year, compared with losses of NT$6.8 billion a year earlier, with net losses per share of NT$2.44.
Last year’s losses included a one-time NT$530 million asset impairment as a result of the company cutting its capacity in China, the firm said.
Revenue last year totaled NT$5.297 billion, down 62.66 percent from NT$14.19 billion in 2018, due to uncertainty in the solar industry, it said.
Looking ahead, the company said that fallout from the COVID-19 pandemic would affect supply and demand in the global solar industry, but added that it had made a necessary corporate transformation to cope with the challenging situation.
“The world economy is facing a great challenge and the global economic effects of COVID-19 are still ongoing,” Motech said.
“Fortunately, one-and-a-half years ago, the company had already started to change its strategy, which included full execution of a long-term polysilicon supply contract to ease cash outflow, reduction of operating costs and enhancement of operational efficiencies across the company,” it said.
Motech shares yesterday fell 9.98 percent to close at NT$4.33 in Taipei trading. They have dropped 46.87 percent this year.
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