E-commerce operator PChomestore Inc (商店街) yesterday unexpectedly announced a NT$363 million (US$12.19 million) privatization plan in a bid to pursue greater returns on investment.
The announcement came after the company saw its losses deepen over the past four quarters amid escalating competition primarily from rival Shopee Taiwan Co (樂購蝦皮).
PChomestore incurred a loss of NT$1.06 billion last year, or a loss per share of NT$43.25, nearly three times the company’s share capital of about NT$345 million.
The losses were blamed on last year’s operating expenses of NT$1.27 billion, which skyrocketed from NT$240 million in 2016.
The privatization plan might save the company from being dropped from the local stock market, as heavy losses have brought the firm’s book value to NT$1.63 per share, just one step away from falling into negative territory.
According to stock listing rules, companies whose shares are traded on local stock markets would be dropped from the markets once their book value falls into negative territory.
PChomestore chairman Jan Hung-tze (詹宏志) told reporters that delisting the firm would help it expand faster in overseas markets and prevent it “being limited by local regulations.”
“We aim to revamp the structure of the company by introducing new strategic investors and broadening the company’s business scope,” Jan said.
The company’s board of directors yesterday approved the plan to delist PChomestore shares from the Taipei Exchange and go private, Jan said.
The company wants to operate as a start-up, he said, adding that it does not rule out returning to the equity market to raise funds in the long term.
The company has completed 11 million online transactions totaling NT$12 billion, making it the nation’s biggest e-commerce platform operator, he said.
Based on the company’s privatization plan, it is to buy back all outstanding shares at NT$44 per share from shareholders outside the company.
The plan would cost the company about NT$363 million, as only about 24 percent of the company, or 8.27 million shares, are held by outside shareholders.
PChomestore board directors, its parent company, PChome Online Inc (網路家庭), and PChome subsidiary Ruten.com (露天拍賣) together hold a controlling stake of 76 percent, according to a company filing with the Taiwan Stock Exchange.
PChomestore began trading its shares on the Taipei Exchange in 2011. The company is scheduled to hold an extraordinary shareholders’ meeting on June 25 to vote on the privatization plan.
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