Lisa Wang, Taipei Times
Chi Mei Optoelectronics Corp, the nation’s second-largest liquid-crystal-display (LCD) panel maker, is considering issuing corporate bonds to raise NT$4 billion to fund capacity expansion at an existing plant, a company executive said yesterday. The company said that as part of a plan created last year, it is considering issuing corporate bonds to fund expansion at an existing 6G plant.
The bond issuance is part of NT$60 billion syndicated bank loan arranged last year for the construction of a sixth-generation (6G) plant, Chi Mei spokesman Denis Chen said by telephone.
“We have not set a timetable for the bond issuance,” Chen said.
Chen said that the bond issuance is part of a broader fund-raising plan created last year, rather than a new project.
Chi Mei, based in Tainan, planned to use the proceeds to expand the monthly output of a 6G factory from 62,000 sheets to 80,000 sheets of mother glasses measuring 1,500mm by 1,850mm by year-end.
Chi Mei cuts the mother glass into flat panels of different sizes to be primarily used in slim-screen TVs ranging in size from 21.6 inches to 65 inches.
To weather the industry slump, most LCD panel makers, including Chi Mei, have said they would strictly control costs and capital spending on new equipment to keep as much cash as possible for operations.
Separately, Chi Mei said it did not postpone payments to component suppliers, dismissing a report by Chinese-language newspaper the Economic Daily News on Saturday.
“We have made payments to our suppliers as normal,” Chen said.
The report said Chi Mei and Chunghwa Picture Tubes Ltd, the nation’s third-largest flat panel supplier, had asked to delay payments to local component suppliers to limit cash outflow during the downturn.
“We changed some payment terms as customer demand shrinks. This is quite normal when negotiating for component purchases and a common approach taken by most companies to control costs,” said James Wu, chief executive for Chunghwa Picture. “It should not be seen as having any negative connotation [about the company’s financial health].”
As of the third quarter, Chunghwa Picture and Chi Mei had NT$26 billion and NT$48.2 billion, respectively, in cash and cash equivalents.
Remaining cautious on new equipment spending, Chi Mei said it may halve its capital expenditures for next year from NT$10 billion this year.
Chunghwa Picture said it would postpone a capacity expansion plan originally scheduled for this year, which will help it save NT$9 billion in capital spending this year.