E-Ton Solar Tech, a Taiwan-based solar cell maker, said Tuesday that it is planning to make a private placement to raise up to NT$3 billion (US$102 million) to improve its financial structure.
In a statement filed to the Taiwan Stock Exchange, E-Ton said part of the proceeds will be used to repay its debts, with some of the funds used as working capital for purchases of raw materials from overseas.
“To my knowledge, E-Ton needs money to repay its increasing debts,” Horizon Securities analyst Benson Huang said. “As the company incurred further losses in the first quarter of this year, its financial situation has become thornier,” he said.
According to the Taiwan Stock Exchange, E-Ton had NT$5.46 billion in total debt as of the end of December 2011, including NT$3.58 billion the company will have to repay within one year.
In the first quarter, E-Ton incurred NT$355 million in net losses, or NT$0.74 in loss per share, extending from NT$4.05 billion in net losses for the whole of 2011, amid increasingly fiercer competition in the world’s solar energy market.
Huang said that as Europe, which serves as the most important buyer in the global solar energy sector, remains overshadowed by its financial crisis, it is possible that demand for solar energy products will be further squeezed.
“E-Ton has incurred large losses for three years in a row. I see little possibility that the company will have a turnaround this year under such unfavorable circumstances,” Huang said.
Inventec, one of Taiwan’s leading notebook computer ODM service providers, along with its affiliates, acquired a 47.97 percent stake in E-Ton for about NT$5 billion last year in a bid to gain a foothold in the renewable energy business.
“I suspect the investments from Inventec have been almost consumed and that’s why E-Ton is seeking additional funding to resolve its pressing financial problems,” Huang said.
E-Ton shares closed down 4.70 percent at NT$15.20, while the index of the over-the-counter market, on which the stock is traded, rose 0.17 percent to 105.82 points.
