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    Chang Ku's creditors may liquidate the company now

    EXTENSION DENIED: The Kaohsiung District Court threw out the company's request for time to reorganize NT$10.6 billion of debt, saying that the company is in trouble because creditors won't lend it more money

    BLOOMBERG, TAIPEI
    Wednesday, Jul 17, 2002, Page 11

    Creditors of Chang Ku A-Life Technology Co (éネм), formerly called Chang Ku Building Co (é砞), may liquidate the builder right away, Taiwan's Kaohsiung District Court ruled, throwing out a company request for time to reorganize NT$10.6 billion (US$320 million) of debt.

    "Chang Ku is having difficulty staying in business" because creditors won't lend it more money, the court said in a judgment denying an extension of time to make payments sought by Cheng Ku, which owns Taiwan's third-tallest building.

    The developer borrowed in the 1980s and 1990s to build homes. A slump in housing sales caused by overbuilding cut Chang Ku's regular income, leaving it unable to repay debt. Creditors may now sell off the company's assets to recover their money. "Creditors will meet to consider plans, including selling Chang Ku assets, to protect loans they made," said Grace Fang (よ获), spokeswoman for China Development Financial Holding Corp (い地秨祇北), from which Chang Ku borrowed NT$110 million in 2001 to repay bonds.

    China Development lent Chang Ku the money because it gua-ranteed the bonds and would have had to repay them had the developer defaulted in October, Fang said. The Chinese Bank (い地蝗︽) lent Chang Ku NT$75 million to repay bonds maturing in May 2001.

    Chang Ku said in a statement that the company will appeal the court-ordered liquidation because it has assets of NT$15.1 billion, enough to meet obligations.

    The nation's developers are having problems paying debt to banks with banks struggling with NT$1.68 trillion of bad loans at the end of March. Delpha Construction Co (地砞) defaulted on NT$327 million of bonds this year. Bao Chen Construction Co (腳Θ砞) won a court order last month barring creditors from seizing its assets while it re-negotiates terms of NT$3.5 billion of debt.
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