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Financially troubled flat panel maker lays off 63 workers

2018/12/26 15:00:30

Taipei, Dec. 26 (CNA) Chunghwa Picture Tubes Ltd., a Taiwan-based maker of small and medium-sized flat panels, has laid off 63 workers, the latest bad news for the financially troubled firm.

In a statement released Tuesday, Chunghwa Picture Tubes, which is seeking bankruptcy protection, confirmed the layoffs, saying that the reduction in its workforce is aimed at cutting its operating costs.

Chunghwa Picture Tubes said it has informed the Department of Labor of the Taoyuan City government of the layoffs and has promised to treat them according to the Labor Standards Act.

The 63 affected workers, accounting for 1.4 percent of its total workforce of 4,450 based in Taiwan, worked for Chunghwa Picture Tubes until Monday, but would be paid until Friday, the company said.

It was the second workforce reduction for Chunghwa Picture Tubes after the company laid off about 65 workers in September.

On Dec. 13, Chunghwa Picture Tubes announced that a board meeting had approved a plan to seek bankruptcy protection after the debt-ridden company saw product prices fall because of a global flat panel supply glut and the ongoing trade dispute between the United States and China.

These unfavorable factors, Chunghwa Picture Tubes said, have made it unlikely that the company and its fully owned subsidiary, Chunghwa Picture Tubes (Bermuda) Ltd., will be able to repay their debts.

According to Chunghwa Picture Tubes, it is NT$34.8 billion (US$1.13 billion) in 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.

The flat panel supplier suddenly suspended production in two plants in Longtan and Yangmei districts in Taoyuan Dec. 16 due to a lack of supplies of raw materials.

But it announced Dec. 20 that it had reached an agreement with suppliers to restore supplies, which paved the way for production resumption.

Earlier this week, it said it incurred NT$1.28 billion in net losses, or NT$0.15 in LPS in November after it posted NT$1.356 billion in consolidated sales in the month, down 55 percent from a year earlier.

Analysts said that despite the agreement with its suppliers for production resumption, market confidence in Chunghwa Picture Tubes remained weak and November's losses made investors even more nervous.

Shares of Chunghwa Picture Tubes fell 10 percent, the maximum daily decline, to close at NT$0.53 on the Taiwan Stock Exchange Wednesday. Since Dec. 13, the stock has lost more than 66 percent.

Chunghwa Picture Tubes is a subsidiary of conglomerate Tatung Co.

Another Tatung unit -- loss-incurring multicrystalline solar wafer supplier Green Energy Technology Inc. -- is also seeking 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.

(By Wei Shu and Frances Huang)