Shares in Kee Tai Properties Co (基泰建設) yesterday closed down by its daily limit for the second consecutive session as it struggled to calm the public outcry over its construction site incident on Thursday last week.
As investors cut holdings in Kee Tai, the Taipei City Government sought a second injunction to prevent the company from selling assets and dodging legal responsibility for the damages.
It is difficult to price the total damage caused by the residential project in Taipei’s Dazhi (大直) area in Zhongshan District (中山) that affected 25 neighboring households, Chi Far Securities Investment Consultant Co (啟發投顧證券) said.
Photo: Chu Pei-hsiung, Taipei Times
The city government has ordered Kee Tai to halt all construction of its presale residential projects within Taipei until the buildings’ safety is ensured, and damages for the ill-fated Dazhi project have been settled.
There would be direct and indirect losses, the brokerage said, saying that indirect costs include delayed construction and corporate image damages.
“The longer the settlement, the heavier the losses,” Chi Far said.
Kee Tai seeks to secure residents’ consent in rebuilding their houses under the co-venture model, whereby residents could trade their damaged properties for new houses which have an equivalent size, Kee Tai Properties president Feng Hsien-mien (馮先勉) said at a news conference on Sunday.
The company has also pledged to pay for relocation, rents and other damages caused by the construction site incident, Feng said.
Kee Tai has sufficient liquidity to emerge from the incident unharmed, with NT$3.8 billion (US$118.82 million) of cash available and an approved loan quota of NT$5 billion, he said.
The Bank of Taiwan (台灣銀行), Taipei Fubon Bank (台北富銀行), First Commercial Bank (第一銀行), Taishin International Bank (台新銀行) and a dozen more banks have signed financing agreements with Kee Tai, he added.
The company put the total damage at NT$300 million, or losses of NT$0.5 to NT$0.6 per share that would be recognized in phases in coming years.
The developer said it achieved earnings of NT$1.48 per share in the first half of this year, making it well positioned to absorb initial losses linked to the incident at NT$0.1 to NT$0.2 per share.
Kee Tai chairman Chen Shih-ming (陳世銘) offered to resign from his position on Sunday last week.
Meanwhile, the Taipei District Prosecutors’ Office said on Saturday if had opened an investigation into the developer.
Shares closed at NT$12.05 yesterday, a decline of 18.58 percent from Thursday’s close of NT$14.8.
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