Mosel Vitelic Inc (茂矽), parent of the nation's second-largest memory-chip manufacturer ProMOS Tech-nologies Inc (茂德科技), may be on its last legs after failing to secure an agreement to pay back the second debt it defaulted on in less than two months, analysts said yesterday.
"Mosel is in a very difficult situation and probably cannot survive," said Alfred Ying (
A June 20 default on 70 percent of a NT$1.6 billion convertible bond came hot on the heels of the deferment of payment on a NT$4.7 billion bond that fell due in April.
Mosel managed to fend off creditor banks at the beginning of last month by paying 35 percent of the NT$4.7 billion bond in cash and pledging to clear the remaining 65 percent in 10 monthly installments.
Last week, Mosel vice president Thomas Chang (張東隆) said he would ask creditors to accept a similar pay-back plan for the latest debt. He hopes they will accept 12 monthly installments to clear the remaining 70 percent of the lastest NT$1.6 billion debt.
Another analyst finds it hard to believe Mosel has managed to stay afloat so long.
Mosel was suspended from trading on the TAIEX on May 9 and was still issuing bonds last week, said Eldon Pei, a memory-chip industry analyst at Deutsche Bank in Taipei who covers ProMOS.
"I'm quite surprised Mosel was still issuing US$30 million of bonds in its shares last Friday when they are not trading," he said.
To salvage Mosel and find the remaining cash, Hu Hung-chiu (胡洪九) resigned from Mosel's other subsidiary ChipMos Technologies (Bermuda) Ltd (南茂科技) on Monday to head a restructuring effort at the loss-making parent.
Hu placed his vice president Hsing Tuan (段行迪) and ProMOS president Chen Min-liang (陳民良) in charge of profitable ProMOS yesterday in order to concentrate on the ailing Mosel.
"Hu wants to concentrate on the restructuring of Mosel, so he appointed Chen and Tuan to take care of business at ProMOS," ProMOS vice-president Albert Lin (林育中) said yesterday.
Hu faces a Herculean task.
"There is one possible survival strategy," Ying said, "betting on the stock market."
The stock market has gained 13 percent this quarter, the largest gain since the end of 2001, Bloomberg News reported yesterday.
"With a stronger stock market, the ProMOS shares Mosel holds are worth more. They could sell some of those shares," Ying said.
Mosel has also agreed to sell its dynamic random access memory (DRAM) technology and equipment to ProMOS, but it is unclear how the transfer will be made.
"We don't know how the two companies will value the DRAM business," Ying said.
ProMOS may have its own problems to contend with while Mosel struggles to survive.
"ProMOS's problems go far beyond its problems with the parent company," Elton Pei said. "It does not have a clear direction where its technology is going to come from."
ProMOS was founded by Mosel and Germany's Infineon Technologies AG. Mosel and Infineon had a falling out in January over who would control ProMOS.