02.13.2001
Ritek becomes largest shareholder of Gigastorage

• Ritek (2349 'Lai De') yesterday purchased an additional 3.7m shares of Gigastorage Corp. (2406 'Guo Shuo') at a price of NT$26.8 per share. Ritek bought 22m Gigastorage shares at NT$26 last Monday. Ritek is now the company's largest single shareholder, with around 11% of total capital.

• It is expected that the board of directors will be restructured ahead of term expiration, although Gigastorage has not confirmed this. It is also expected but unconfirmed that Ritek will make a strategic alliance with Gigastorage on both its current CD-R business and future optical communications interests.

• Gigastorage reported preliminary pretax losses of NT$169m in 2000 for a negative EPS of NT$0.74, the lowest among listed CD-R firms. We estimate Ritek's net profit reached NT$7.7b for an EPS of NT$6.15 in 2000. It has a CD-R capacity of 2b units per year, compared to 24m for Gigastorage.

MarthaChen@Primasia.com +886-[0]2-2547-8878