EVA Airways Corp (EVA, 長榮航空), the nation’s second-largest carrier, plunged to a five-year low in Taipei trading after offering to sell new shares valued at about NT$4.86 billion (US$160 million) to fund aircraft purchases.
The airline fell by the 7 percent daily limit to NT$9.72, the lowest since May 22, 2003. The company will sell 500 million new shares, it said yesterday. The potential value of the sale was calculated based on yesterday’s closing price.
EVA and larger rival China Airlines Ltd (中華航空) have both dropped more than 30 percent in the past month as they cut services to offset jet-fuel prices that have almost doubled in a year. Both carriers also posted wider than expected losses in the first quarter.
The share sale plan is like “an emergency rights issue to cover huge losses,” Paul Dewberry, a Merrill Lynch & Co analyst, said in a report yesterday. EVA Airways “remains in difficulty and we should continue to short the stock.”
EVA acting spokeswoman Katherine Ko (柯文玲) denied that share sale was an emergency measure.
“The company has planned this rights issue for a long time,” she said. It “doesn’t have anything to do with the losses” in the first quarter.
The airline, based in Taoyuan County, posted a NT$2.29 billion loss in the period.
The new shares will help pay for three Boeing Co 777-300ERs due to be delivered by the end of 2010, Ko said.
The share sale is expected to be completed in November or December, she said.
TRANSASIA
Domestic transporter TransAsia Airways Corp (復興航空) confirmed yesterday it was abandoning its Taipei-Kaohsiung and Taipei-Tainan flight routes because of sluggish business.
The decision would be effective Aug. 1, TransAsia spokeswoman Janet So (湛華生) said yesterday during a telephone interview.
TransAsia Airways had to redirect its resources to fly more profitable routes such as cross-strait charter flights, she said.
The carrier’s decision to discontinue the north-south services came amid increasing pressure on domestic carriers from rising fuel costs and competition with the high-speed rail.
The move means that starting next month, there will no longer be flights from Taipei’s Songshan Airport to Kaohsiung and Tainan.
High-speed rail tickets from Taipei to Kaohsiung are NT$1,190 on weekdays and NT$1,490 on weekends and holidays.
MULTIFACETED: A task force has analyzed possible scenarios and created responses to assist domestic industries in dealing with US tariffs, the economics minister said The Executive Yuan is tomorrow to announce countermeasures to US President Donald Trump’s planned reciprocal tariffs, although the details of the plan would not be made public until Monday next week, Minister of Economic Affairs J.W. Kuo (郭智輝) said yesterday. The Cabinet established an economic and trade task force in November last year to deal with US trade and tariff related issues, Kuo told reporters outside the legislature in Taipei. The task force has been analyzing and evaluating all kinds of scenarios to identify suitable responses and determine how best to assist domestic industries in managing the effects of Trump’s tariffs, he
TIGHT-LIPPED: UMC said it had no merger plans at the moment, after Nikkei Asia reported that the firm and GlobalFoundries were considering restarting merger talks United Microelectronics Corp (UMC, 聯電), the world’s No. 4 contract chipmaker, yesterday launched a new US$5 billion 12-inch chip factory in Singapore as part of its latest effort to diversify its manufacturing footprint amid growing geopolitical risks. The new factory, adjacent to UMC’s existing Singapore fab in the Pasir Res Wafer Fab Park, is scheduled to enter volume production next year, utilizing mature 22-nanometer and 28-nanometer process technologies, UMC said in a statement. The company plans to invest US$5 billion during the first phase of the new fab, which would have an installed capacity of 30,000 12-inch wafers per month, it said. The
Taiwan’s official purchasing managers’ index (PMI) last month rose 0.2 percentage points to 54.2, in a second consecutive month of expansion, thanks to front-loading demand intended to avoid potential US tariff hikes, the Chung-Hua Institution for Economic Research (CIER, 中華經濟研究院) said yesterday. While short-term demand appeared robust, uncertainties rose due to US President Donald Trump’s unpredictable trade policy, CIER president Lien Hsien-ming (連賢明) told a news conference in Taipei. Taiwan’s economy this year would be characterized by high-level fluctuations and the volatility would be wilder than most expect, Lien said Demand for electronics, particularly semiconductors, continues to benefit from US technology giants’ effort
‘SWASTICAR’: Tesla CEO Elon Musk’s close association with Donald Trump has prompted opponents to brand him a ‘Nazi’ and resulted in a dramatic drop in sales Demonstrators descended on Tesla Inc dealerships across the US, and in Europe and Canada on Saturday to protest company chief Elon Musk, who has amassed extraordinary power as a top adviser to US President Donald Trump. Waving signs with messages such as “Musk is stealing our money” and “Reclaim our country,” the protests largely took place peacefully following fiery episodes of vandalism on Tesla vehicles, dealerships and other facilities in recent weeks that US officials have denounced as terrorism. Hundreds rallied on Saturday outside the Tesla dealership in Manhattan. Some blasted Musk, the world’s richest man, while others demanded the shuttering of his
RSS