Epistar plans to record NT $ 3.96 billion asset impairment
By Chen Cheng-hui / Journalist
Epistar Corp (晶 電), a leading domestic supplier of LED epitaxial wafers and chips, said yesterday its board of directors approved an approximately NT $ 3.96 billion asset impairment plan. ($ 139.3 million), before forming a holding company with Lextar Electronics Corp (隆達) tomorrow.
Impairment of assets would not have a material effect on its operations and cash position, Epistar said.
The company’s balance sheet is healthy, with cash and cash equivalents of NT $ 6.51 billion, and its debt-to-equity ratio was 26.3% at the end of September, according to a regulatory filing.
Epistar and Lextar, which manufacture LED modules and provide downstream packaging services, are to form Ennostar Inc (富 采 投 控) through a share swap, with the companies becoming 100% subsidiaries of the new entity, but they would continue to operate independently.
Epistar’s board of directors at yesterday’s meeting reviewed the results of the asset impairment assessment in accordance with the company’s business plans.
The plans focus on developing and manufacturing new display technologies, such as mini-LEDs and micro-LEDs, which would be critical to its business, he said.
“The assets acquired by the company in 2014 from Formosa Epitaxy Inc (璨 圓 光電) were mainly intended for the production of LED products, which are in a very competitive situation, and the chances of switching this production line to mini -High quality LED. and micro-LED manufacturing are low, ”Epistar said on the record.
“After the company performed an asset impairment test in accordance with IFRS 36, the board of directors agreed to deduct all of the NT $ 3.18 billion goodwill from the acquisition of Formosa Epitaxy and other related fixed assets NT $ 350 million for depreciation of assets, ”he said.
The board of directors also decided to recognize NT $ 430 million in impairment losses for shares of a subsidiary of Unity Opto Technology Co (東 貝 光電) which were pledged as collateral for accounts receivable due to deteriorating financial statements. unit operations, Epistar said.
The overall asset depreciation of NT $ 3.96 billion is expected to affect the company’s earnings per share for last year by NT $ 3.7, the company said.
The company reported a net loss of NT $ 3.25 per share in the first three quarters of last year.
Going forward, the company said it will focus on mini-LEDs, micro-LED displays, smart sensing and automotive applications, adding that massive sales of mini-LEDs will start this year and revenues will begin. are expected to increase significantly from last year.
Epistar and Lextar are due to be delisted from the Taiwan Stock Exchange tomorrow, and the new holding company is due to debut at NT $ 82.8 per share.
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