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進入《TAIPEI TIMES 焦點》 Fubon says it can absorb LCY Chemical exposure
Fubon Financial president Vivien Hsu talks to reporters in Taipei on March 20. Photo: CNA
‘LIMITED AND BEARABLE’: Fubon said its life insurance subsidiaries had sizeable exposure to LCY, but it did not plan to sell its stake or book any losses in the short term
By Crystal Hsu / Staff reporter
Fubon Financial Holding Co （富邦金） said yesterday its life insurance and banking subsidiaries have sizable exposures to LCY Chemical Corp （李長榮化工） and its affiliate Taiwan Polysilicon Corp （福聚太陽能）, but both can absorb the potential losses.
Fubon Life Insurance Co （富邦人壽） is a major shareholder in LCY Chemical with 58 million shares in the petrochemical product supplier, whose market value has shed NT$10 billion since the fatal gas pipeline explosions in Greater Kaohsiung on July 31 and Aug. 1, Fubon Life’s senior vice president Raymond Lin （林立民） told an investors’ conference in Taipei.
LCY Chemical is suspected of being to blame for causing the explosions that killed 30 people and injured 310.
LCY Chemical is the largest shareholder in loss-making Taiwan Polysilicon, which is negotiating debt payments for a syndicated loan of NT$10.7 billion, with Taipei Fubon Commercial Bank （北富銀） acting as the lead creditor.
The decline in LCY Chemical’s share price erodes 7 percent of Fubon Life’s unrealized equity investment gains that stood at NT$70 billion on June 30, Lin said.
“The losses, even if realized, are limited and bearable,” Lin said.
The insurer does not plan to sell its LCY Chemical stake or book the losses in the short term, Lin said, adding that the investigation into the explosions may take years, with more parties likely to be involved and have to pay a share of the compensation claims.
Fubon Financial president Vivien Hsu （許婉美） said the conglomerate decided keep the stake after consulting accountants over the legality and financial implications of the issue.
“We believe it is better to be patient when things are in a fluid state,” Hsu said.
That patience was seemingly rewarding when LCY Chemical shares closed up by the daily 7 percent limit at NT$14.25 yesterday, after a 45.3 percent plunge over the past month, compared with with TAIEX’s 1.99 percent correction, Taiwan Stock Exchange data showed.
LCY Chemical had a net worth of NT$16.18 per share as of June 30 after posting NT$11.52 billion in losses, or a loss per share of NT$9.2, according to stock exchange filings.
That was after booking a NT$6.7 billion loss linked to its stake in Taiwan Polysilicon, the filings said.
Taipei Fubon Bank has NT$1.14 billion in secured loans to Taiwan Polysilicon, company vice president Mike Liu （劉明藩） said, higher than 13 other peers, such as Cathay United Bank （國泰世華銀行）, E.Sun Commercial Bank （玉山銀）, DBS Bank and CTBC Bank （中信銀）.
As the cash-strapped company has previously managed to honor its debt payments, Taipei Fubon Bank has so far only set aside a 10 percent provision, he said.
新聞來源：TAIPEI TIMES
