On 30 September 2008, Balda (Bad Oeynhausen / Germany; www.balda.de) announced that it had sold a 12% stake in touch screen specialist TPK Holding (Xiamen, Fujuian / China) back to the Chiang family, reducing its share to 38%. In return, Balda has acquired the 5% stake in the Asian subholding Balda Investment Singapore (BIS) held by Michael Chiang and BIS is now once again wholly-owned by Balda. However, Balda will not participate in an upcoming capital increase by TPK, which will result in its share being further diluted to just 33.5%.

Balda claims that the proceeds from this transaction mean it will not have to raise additional funding from the banks. In future it will be concentrating on plastic components and electronic products for the communications sector. TPK will now be regarded as an equity investment. In other words, Balda is selling the future to bail out the present.

Balda only acquired its stake in TPK from Chiang in 2006. The joint venture built a facility with a total of 63,000 m² production and administration space, which was opened in 2006. It produces two to eight inch (five to 20 cm) touch screen displays.

Almost exactly two years ago, Balda’s CEO Joachim Gut said: “The touch screen business is tremendously important for the future of Balda.” He was right, although not in the way he originally meant. The ambitious repositioning of the company from an injection moulding firm specialising in housings for mobile phones to a “developer and manufacturer of complete plastic, metal and electronic component groups and touch sensors with high vertical integration” to quote Gut, has brought the company to the brink of bankruptcy. Accordingly, two-thirds of shareholders failed to ratify the actions of the management board at last July’s AGM and so indirectly called on Gut to step down.

The company’s medical division is still up for sale. Balda intends to use the proceeds of this transaction and the sale of the headquarters building, which is expected to take effect in early 2009 at the latest, to reduce liabilities. The continuing operations posted sales of EUR 103.1m in the first half of this year, compared with EUR 86.5m in the same period of last year. EBITDA was EUR 7m (EUR 111.3m in the first six months of 2007) and EBIT plunged to a loss of EUR 4.5m, compared with a profit of EUR 5.4m last year.