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Taiwan’s BenQ on Tuesday drastically raised the estimate for the cost of an eventual rescue of its German mobile subsidiary, reaffirming its argument that turning round BenQ Mobile would have threatened the group’s financial survival.
“BenQ Mobile lost €840m ($1.07bn) during the 12 months following the acquisition on October 1 2005,” Rick Lei, BenQ’s chief strategy officer, told the FT. “We would have needed to pour in at least as much again to make it profitable.”
Only last week, BenQ estimated the cost of turning round the business would be nearer €500m.
Mr Lei’s comments followed BenQ’s decision last week to put the German mobile unit it bought in 2005 from Siemens into insolvency.
He said BenQ was surprised by criticism from Siemens, Europe’s biggest engineering group, in the past few days over BenQ’s move last week to stop funding BenQ Mobile. Mr Lei said he had been in close consultation with Siemens until the week of September 18 on how to rescue BenQ Mobile.
Eric Yu, the Taiwanese electronics group’s chief financial officer, said among other steps, the Taiwanese company had sought early payment of the outstanding instalments under the acquisition contract, but to no avail.
The remarks follow an announcement by Siemens on Monday that it would halt an executive pay rise and set up a €35m solidarity fund for BenQ Mobile’s more than 3,000 employees who face the threat of losing their jobs. Siemens also said it was considering taking legal action against BenQ, in particular over the future use of its brand and patents. Siemens and BenQ have both been criticised in
In her reunification day speech on Monday, Chancellor Angela Merkel urged Siemens to help BenQ Mobile workers, saying that the German engineering group had to take responsibility for 3,000 workers at BenQ Mobile who are facing the loss of their jobs.
Meanwhile, Erwin Huber, the Bavarian economics minister, said he wanted to work with Siemens to find a
Mr Huber also criticised BenQ, saying Bavaria would consider legal action to hold the Taiwanese company to its obligations.
BenQ said the use of the Siemens brand for handsets for another four years and hundreds of patents remained the property of the parent rather than the