CSC to sell shares it purchased in 2008 to reward employees
Friday, 23 Oct 2009
Taipei times reported that China Steel Corporation is planning to sell shares it bought back late last year on the open market to its employees as part of measures to reward employees as business improves from the global economic downturn late last year.
Mr Hung Jui bin public relations official at CSC said that it is considering distributing these shares to employees sometime next month. He added that "The management is still evaluating when is the most appropriate time to sell these buyback shares to our employees."
CSC's plan to reward employees with repurchased shares as a type of bonus came after Taiwan Semiconductor Manufacturing Co chairman Mr Morris Chang announced that the company would give employees a half month bonus next month because of good third quarter performance. In July, TSMC offered employees a half month salary as a bonus to reflect its strong second quarter sales.
It may be noted that CSC conducted a share repurchase program between October 8th 2008 and December 7th 2008, buying back 108 million shares at TWD 23.24 per share on average. The company may sell these shares to employees at TWD 23 per share, with the maximum amount of 10,000 shares per employee.
Mr Hung said that the move was unrelated to the company’s slow recovery in cash-flow generation, especially after Taiwan Ratings Corporation last month lowered its credit ratings on China Steel on concerns of the steel maker’s financial risk profile.
He added that "It’s true that the company is facing financing pressure because we need to fund the construction of two blast furnaces at our subsidiary, Dragon Steel Corp, in Taichung over the next two years. But the planned share sale is a way to thank employees for their hard work at a time when many of them have had their pay cuts early this year."
