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Chunghwa Picture Tubes in talks with suppliers to restart production

2018/12/17 15:16:25

Taipei, Dec. 17 (CNA) Financially-troubled flat panel maker Chunghwa Picture Tubes Ltd., which has suspended production at its two plants, said Monday that it is in discussions with its suppliers in a bid to resume production as soon as possible.

On Sunday, the company suddenly halted production at its plants in Longtan and Yangmei districts in Taoyuan in the wake of its announcement last week that it was planning to seek bankruptcy protection.

Currently, Chunghwa Picture Tubes, a supplier of small and medium sized panels, operates a sixth generation and 4.5th generation plant in Taiwan, with a total workforce of 4,450, including 1,830 on the production lines.

The flat panel maker, which is under the corporate umbrella of Tatung Co., said it had suspended production at the two plants because of problems with raw material suppliers following its bankruptcy announcement.

However, the company said, it has been in negotiations with its suppliers in a bid to return to normal production and that all of its production line workers were still on duty.

Huang Wei-chen (黃維琛), deputy director of the Department of Labor Standards and Equal Employment of the Ministry of Labor, said Chunghwa Picture Tubes must pay its production lines workers, whether or not the plants are in operation, since it is the employer who must take responsibility for the current situation.

If Chunghwa Picture Tubes fails to pay its workers or cuts their pay, it may face a fine of NT$20,000 (US$6,72) to NT$1 million, Huang said.

Chunghwa Picture Tubes said it has signed an agreement to put some NT$600 million into trust, which is expected to ensure that it could pay its workers and continue its operations.

Last week, Chunghwa Picture Tubes said the ongoing trade disputes between the United States and China had contributed to lower prices for screens due to shrinking global demand, which made it unlikely that the company and its fully owned subsidiary Chunghwa Picture Tubes (Bermuda) Ltd. would be able to repay their debts.

According to Chunghwa Picture Tubes, it has NT$34.8 billion in total debt.

In the first nine months of the year, Chunghwa Picture Tubes reported NT$0.93 in loss per share (LPS), compared with NT$0.47 in earnings per share over the same period of last year.

Another subsidiary of Tatung, solar wafer supplier Green Energy Technology Inc., also said last week that it was planning to seek debt restructuring. As of the end of the third quarter, Green Energy's total debt was NT$11.43 billion.

In the first three quarters of the year, Green Energy posted NT$7.77 in LPS, after registering NT$1.72 in LPS over the same period of last year.

In September, Green Energy laid off 203 workers at the Southern Taiwan Science Park, which reportedly was about 20 percent its total workforce.

Wellington Koo (顧立雄), chairman of the Financial Supervisory Commission (FSC), said the FSC will watch closely whether the financial difficulties of the two companies will affect Tatung, its other subsidiaries or their suppliers and creditors.

On Monday, Chunghwa Picture Tubes and Green Energy stocks fell by the daily maximum 10 percent to close at NT$1.06 and NT$4.97, respectively, on the Taiwan Stock Exchange.

(By Pan Chih-yi, Tien Yu-pin and Frances Huang)