Nan Ya Photonics Inc., will first reduce capital by 40% and then increase capital to NT$2 billion (US$62 million at US$1:NT$32) some time this quarter as part of its plan to enter into alliance with LED player Epistar Corp.

Capitalized at NT$700 million (US$21 million), Nan Ya saw its net value drop to NT$430 million (US$13.4 million) until the end of the third quarter of 2009 because of operation loss. The company will cut capital by NT$300-350 million (US$9.3-10 million to make up for the loss. Nan Ya Photonics Chairperson R.Y. Wang said the company will enhance its competitiveness and finance as well as team up with LED chipmaker Epistar through the capital overhaul project. According to Wang, Epistar will pay her company NT$1 billion (US$31 million) in the capital increase plan to become its biggest shareholder.

Industry executives analyze the partnership project reflects the determination of the Formosa Plastics Group (FPG), which owns Nan Ya Plastics, to develop strong presence in green-energy sectors, including solar energy, lithium battery and LED.