ECS to sell LCD manufacturing affiliate stake to Pouchen

Elitegroup Computer Systems (ECS) on May 8 announced after its board of directors meeting that it will start selling its 20.94% stake in ProArch Technology, its LCD monitor manufacturing affiliate, to another company on May 12.According to ProArch, the buyer of ECS’s stake will be the motherboard maker’s partner Pouchen, which already owns 30.85% of ProArch. After the transaction, Pouchen will control over half of the monitor manufacturer’s shares.ECS said that the price for the deal will be set at NT$9-11 per share. As the price is lower than its original purchase price of NT$13, ECS will need to claim a small investment loss, but will also receive cash income of over NT$300 million.As part of the transaction, ECS has given up its seat on the ProArch board, but ProArch said this would not affect its cooperation with ECS. Currently, ProArch’s LCD monitors are sold bundled with ECS’s barebone system products.The deal is seen as the latest in a series of restructuring moves by ECS this year. ECS senior vice president and spokesperson Chen Ming-tsun said that the company has so far had no further plans to sell its stake in other affiliates.On April 8, the Chinese-language Economic Daily News reported that Chi Mei Group intended to sell its over 20% stake in ProArch to Pouchen.In 2002, ECS announced that it would buy a 21.06% stake in ProArch for NT$407 million (NT$13 per share) to acquire a stable supply of LCD panels and monitors. Pouchen also announced that it would buy a 31.6% stake for NT$616 million. Those ratios have since changed slightly due to ProArch’s issuing of new shares for employee stock options.Source: DigiTimes