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Bank loans to two financially troubled local firms top NT$10 billion

2018/12/14 17:27:11

Huang Shih-chang (黃世昌, center) Chunghwa Picture Tubes Ltd. chief financial officer / CNA file photo

Taipei, Dec. 14 (CNA) The amount of credit extended by banks in Taiwan to two financially struggling companies, flat panel maker Chunghwa Picture Tubes Ltd. and solar wafer supplier Green Energy Technology Inc., has surpassed NT$10 billion (US$324 million), according to data released Friday.

Chunghwa Picture Tubes has total bank loans of NT$8.25 billion, while Green Energy has NT$2.63 billion, the data from President Securities Investment Consulting Co. showed.

King's Town Bank was the largest creditor to the two enterprises, which are both under the corporate umbrella of conglomerate Tatung Co., according to the data.

It showed that King's Town Bank participated in a NT$6.75 billion syndicated loan, led by Bank of Taiwan, to extend NT$1.495 billion to Chunghwa Picture Tubes and almost NT$4 billion to Green Energy.

Chunghwa Picture Tubes, a manufacturer of small and medium sized flat panels, said Thursday that its board had approved a plan to seek bankruptcy protection due to a global supply glut.

It said the ongoing trade tensions between the United States and China have also contributed to lower prices for screens due to shrinking global demand, which makes it unlikely that the company and its fully owned subsidiary Chunghwa Picture Tubes (Bermuda) Ltd. will be able to repay their debts. According to Chunghwa Picture Tubes, its debt now totals NT$34.8 billion.

In the first nine months of the year, Chunghwa Picture Tubes reported NT$0.93 in loss per share (LPS), compared with NT$0.47 in earnings per share over the same period of last year.

The screen maker said it will seek a new business model by restructuring under bankruptcy protection, which will ensure the rights of its employees, debtors and shareholders.

Meanwhile, Green Energy said it will apply through the Ministry of Economic Affairs to renegotiate the terms of its bank loan payments.

As of the end of the third quarter, Green Energy's total debt was NT$11.43 billion, while its book value per share was NT$3.3.

In the first three quarters of the year, Green Energy posted NT$7.77 in LPS, after registering NT$1.72 in LPS over the same period of last year.

Like Chunghwa Picture Tubes, Green Energy also said it will seek to restructure its business to help deal with its heavy losses and loans.

The solar energy firm said it will develop high end products to appeal to a niche market.

In September, Green Energy laid off 203 workers at the Southern Taiwan Science Park, which reportedly was about 20 percent its total workforce.

On Friday, shares of Chunghwa Picture Tubes fell by the daily maximum 10 percent to close at NT$1.17, while Green Energy stocks also dropped 10 percent, ending at NT$5.52 on the Taiwan Stock Exchange, which closed down 0.86 percent at 9,774.16 points.

(By Pan Chih-yi, Chang Chien-chung and Frances Huang)