Skymedi slashes capital size by 40 p.c.

TAIPEI, TAIWAN: In its bid to add strength to its core business by establishing a wholly-owned subsidiary, Taiwanese flash control manufacturer Skymedi has slashed its capital size by 40 per cent. The company has also spun off its multimedia processor division with this target in mind.

Reducing its paid-in capital by 40% to NT$412.79 million (US$12.54 million), the company is aiming at concentrating more on NAND flash-based applications such as memory cards and USB drives, said Digitimes in a report.

The company will be spinning off its multimedia solutions operation covering controllers for digital photo frames, portable media players and mobile TVs, it added. It is being speculated that the spin-off of the flash control maker’s non-core business would become effective on November 25, 2009, if the necessary approval is granted by the shareholders.

Meanwhile, related reports quoting industry sources pointed out that Skymedi's plans to reduce capital and turn its unprofitable unit into a subsidiary come as part of its pending move to apply for listing on the over-the-counter (OTC) stock market.

This speculation comes in the wake of the belief that the reduction in capital might add more weight to Skymedi’s net worth per share. This, incidentally, currently stands at NT$14.374, said the sources.