Pacific Electric Wire & Cable Co (太平洋電線電纜), the nation's largest copper-wire maker, plans to ask creditors next month to lower interest and extend payment on NT$17 billion (US$493 million) of debt, spokesman Kuo Chuan (郭傳) said.
The stock plunged by the 7 percent daily limit after the company said it will ask 54 creditors on Feb. 11 to lower interest charges to 4 percent from as much as 7 percent.
It also will ask creditors, including Hua Nan Financial Holdings Co (
"Investors will shun companies with doubtful finances," said Jerry Chen, who manages NT$3.5 billion Excellent Fund at First Global Investment Trust Co (
The company may post a net loss for last year, its second one, after a Taipei Court granted Safeco Insurance Co's request to freeze NT$1.2 billion of assets.
Safeco alleges Texas-based Pacific USA Holdings Corp, a wholly owned unit of Pacific Electric Wire, failed to fulfill a supply contract. Pacific Electric Wire is appealing the ruling, Kuo said.
"The lawsuit was totally unexpected and has distressed our asset-allocation and debt-payment plans," Kuo said.
Persuading creditors may be tough as the government urges banks to clear bad loans accumulated in a 2001 recession and a decade-long property slump so they can compete with foreign rivals.
"Bankers are less welling to compromise as corporate failures during recent slowing economy rattled their confidence," Kuo said.
RSS