Chi Mei Corp (奇美實業), a leading synthetic and electronic materials supplier, yesterday said that it has incurred more than NT$1 billion (US$35.89 million) in losses after disposing of some of its stake in flat panel maker Innolux Corp (群創光電).
The sale of about 183.71 million Innolux shares, representing a more than 2 percent stake in the company, came after a rethink about how it wanted to reallocate its funds, Chi Mei said in a filing with the Taiwan Stock Exchange.
The company disposed of the Innolux shares in four transactions between Aug. 10 and Wednesday last week and it rceived NT$3.26 billion from the sales, incurring NT$1.114 billion in losses.
Those funds would be invested in US dollar-denominated bonds, which are expected to yield a higher return, said Chi Mei, whose stake in Innolux has now fallen to 0.83 percent at a time when flat panel prices are falling due to weakening global demand.
Innolux shares hit NT$32.55 on April 29, a 10-year intraday high, but they have since come under pressure amid concerns over falling product prices.
The shares fell 47 percent between April 29 and Wednesday last week, the last day Chi Mei sold Innolux shares.
Before the disposal, Chi Mei was Innolux’s third-largest shareholder with a 2.59 percent stake, trailing Hon Hai Group’s (鴻海集團) 6.79 percent and the Labor Pension Fund’s 2.89 percent, according to Innolux’s latest annual report.
Innolux posted its highest-ever quarterly net profit of NT$21.4 billion in the second quarter, or earnings per share at NT$2.05, but flat panel prices, especially large screens for TVs, have since fallen.
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