Hualon Corp (
The bounced check was drawn on Hualon's account at Baodao Commercial Bank (
Hualon has asked the Ministry of Finance to mediate with creditor banks to lower interest charges and postpone maturity dates on its loans to help its finances, Yao said.
The finance ministry has refused to make specific instructions to Hualon's creditor banks, though it will allow banks to conduct their own evaluations, the Central News Agency reported, citing vice finance minister Sean Chen (
Hualon, which produces polyester filaments, taffeta, and blended yarns, is the latest Taiwan textile maker to struggle in a shrinking domestic market as garment makers and other customers relocate plants to China and southeast Asia, where production costs are lower.
Hualon lost NT$4 billion last year, compared with a NT$231 million loss in 1999. The company lost NT$599 million in the first three months of 2001.
Hualon shares fell NT$0.05, or by the 7 percent daily limit for the second consecutive day, to NT$0.67 a share. The stock has fallen 89 percent, compared with the TWSE Index's 44 percent drop in the past 12 months.
In May of this year, Hualon and Tuntex Distinct Corp (
Tuntex's financial woes were recently compounded by a huge fire at its Eastern Science Park (
Banks said they will first study Tuntex's application for restructuring with a local court and then decide on whether to take actions to help with the reorganization of the company. But some bankers might raise objections to the company's restructuring plan if it fails to present a repayment program.
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