ProMOS Technologies announced its capital reduction went into effect on July 19. The DRAM maker will complete its capital reduction from NT$72.6 billion (US$2.3 billion) to NT$25.4 billion at the end of the third quarter at the earliest.
ProMOS said it also plans to issue new shares through a private placement, with an aim to bring in more than one strategic partner. ProMOS will disclose its new partners after carrying out its capital reduction.
After the capital downsizing, the net value of ProMOS's shares will increase to more than NT$5 from NT$2.9 at the end of 2009, according to market watchers. If the company's core business continues to generate profits, the value may top NT$10, the watchers expect.
ProMOS was quoted in previous reports estimating the company returned to profitability in the second quarter. The DRAM maker saw its twelfth straight quarterly losses in the first quarter of 2010.
Rival Powerchip Technology also began to proceed with an exercise to reduce its capital on June 24. The DRAM maker plans to downsize its capital by 38% to NT$56.09 billion.
Powerchip's net value per share is expected to increase to NT$6.90 when the capital reduction completes by the end of 2010, up from NT$3.31 at the end of 2009, the watchers estimated.