Formosa Plastics units to boost Ha Tinh

Posted on 20 December 2017
 

Source: Taipei Times

Formosa Plastics Group (台塑集團), the nation’s largest industrial conglomerate, yesterday said it plans to invest US$247.88 million in a Vietnamese steelmaking venture through five of its major subsidiaries in second-round fundraising.

The investment is to replenish Formosa Ha Tinh Steel Corp’s (台塑河靜鋼鐵興業) operational capital, which plans to raise US$500 million in the second installment of its ongoing capital injection project, statements from Formosa’s subsidiaries to the Taiwan Stock Exchange said.

Formosa Ha Tinh Steel, the largest foreign direct investment venture in Vietnam, would see its paid-in capital increase from US$5 billion to US$5.5 billion, a Formosa Plastics official said by telephone.

Four of the group’s members — Formosa Plastics Corp (台灣塑膠), Nan Ya Plastics Corp (南亞塑膠), Formosa Chemicals & Fibre Corp (台塑化纖) and Formosa Petrochemical Corp (台塑石化) — each hold an 11.432 percent stake in the Vietnamese unit.

Each company is to pay about US$57.17 million in the second installment in accordance with their shareholdings, separate filings with the Taiwan Stock Exchange said.

Formosa Taffeta Co (福懋興業), the group’s textile affiliate, which holds a 3.847 percent stake, also plans to invest US$19.23 million in Formosa Ha Tinh Steel.

The investment requires board approvals from each company.

The Vietnamese joint venture would have an installation capacity of 7 million tonnes of steel products a year if its two furnaces achieve full capacity, a report by the Chinese-language Economic Daily News said.

The second blast furnace is scheduled to become operational in the first half of next year, Formosa Plastics said on Wednesday last week.

The first furnace, which began production in May this year, has an annual capacity of 3.5 million tonnes, the company said.

In related news, Formosa Plastics is to inject new capital of US$267 million in its fully owned Chinese subsidiary, the company said in a filing with the Taiwan Stock Exchange yesterday.

The Ningbo-based unit — which supplies acrylate, polypropylene and polyvinyl chloride to Chinese customers — has paid-in capital of NT$772.02 million, the filing said.

The new investment would be used to expand production of propylene, an upstream material in petrochemical supply chains, following the company’s long-term target of achieving vertical integration in the Chinese market.

Formosa Plastics shares yesterday edged up 0.11 percent to NT$94.8 in Taipei trading ahead of the announcement, outperforming the benchmark TAIEX, which fell 0.37 percent.

China Steel Corp (CSC, 中鋼), one of major shareholders of Formosa Ha Tinh Steel, yesterday did not show any interest in joining the latest fundraising plan. It did not participate in the venture’s first-round fundraising project.

CSC holds a 22.5 percent stake in the venture. 



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