Taipei, Taiwan’s Yulon Motor Co. said Monday it will draw on its retained earnings and cut its paid-in capital to offset the company’s heavy losses in 2019.
In a widely expected move, the company’s board of directors resolved on Monday to use NT$15.15 billion (US$500.1 million) in retained earnings and cut its paid-in capital by NT$5.73 billion, or 36.4 percent, to NT$10 billion, to offset its 2019 loss of NT$24.47 billion, or a loss per share of NT$15.55.
The company’s shares were not traded in the Taiwan Stock Exchange (TWSE) on Monday after Yulon said it had received TWSE permission to halt trading until Tuesday, pending the release of material information.
Lilian Chen (嚴陳莉蓮), who took over as Yulon chairperson following the death of her husband, Kenneth Yen (嚴凱泰), in 2018, has pursued a range of fiscal reforms during her tenure.
Among them was recognizing impairment losses on the company’s auto manufacturing subsidiaries Luxgen Motors and Dongfeng Yulon and the R&D venture Hua-chuang Automobile Information Technical Center Co.
She has also moved to recognize losses stemming from design changes to a redevelopment of the company’s former factory complex in Xindian District in New Taipei.
While the moves have resulted in major annual losses for the auto conglomerate, they will result in a leaner, more efficient financial structure, according to the company’s leadership.
Source: Focus Taiwan News Channel