LCY Chemical's value plummets in wake of the Kaohsiung tragedy
By John Liu, The China Post
August 5, 2014, 12:00 am TWN
Due to a series of explosions that tore apart Kaohsiung City last Thursday, stock prices of LCY Chemical Corp. (李長榮化工), the company that has received much of the blame for the accident, plummeted for two continuous days and lost NT$2.8 billion in value on the stock market.
The Environmental Protection Bureau of the Kaohsiung City Government has pointed the finger straight at LCY Chemical as the party that failed to follow proper procedures in reporting irregularities, resulting in the disaster.
Although LCY Chemical maintained that the whole truth has not been revealed, its share price fell 13.4 percent yesterday, from NT$25 to NT$21.65. The company's value in the stock market decreased NT$2.858 billion, from NT$21.325 billion to NT$18.467 billion, in just two trading days.
Creditors Request Payment from LCY Chemical
Since the accident, LCY Chemical has coordinated with the government to shut down some pipelines carrying propene, switching to using tankers to transport the gas. While its factory is still in operation, the company will turn down production output for two weeks, reducing revenues by NT$230 million.
The company has received waves of criticism due to the accident. Some of the company's creditors have allegedly requested payment. Although the company suffered losses in the first quarter, LCY Chemical maintained that it was in good financial shape, with the value of assets exceeding liabilities. The company still has abundant capital, so long as banks do not withdraw their support, LCY Chemical said.