Procomp seeks receivership after disastrous share sale

Shares of Procomp Informatics Ltd (博達科技) took a nosedive yesterday after the Taiwanese chipmaker sought the court's receivership ahead of an expected default on a corporate bond payment due today.

Procomp, on the verge of shutdown, filed a restructuring plan to the local district court in order to protect its assets from creditors' seizure as it is bound to fail to pay off the nearly NT$3 billion in bonds, according to a company statement submitted to Taiwan Stock Exchange Corp yesterday.

The company blamed a flop of an overseas share sale -- in which it planned to raise US$117 million, but fetched only half of the amount -- for the default, the statement said. As a result, the chipmaker decided to suspend the share sale, it said.

The cash-crunched chipmaker could not be reached for comment on possible plans to pay off its debts as of press time.

Procomp stocks plunged nearly 7 percent, the intra-day limit, to NT$8.45 on the benchmark TAIEX yesterday.

"The impact on Procomp spread to other companies in poor financial situations, such as Global Sun Technology Inc (陽慶)," said George Wu (吳裕良), an analyst with Primasia Securities Co.

Shares of Global Sun also plunged 7 percent, to NT$13.35, on the Gretai Stock Exchange, the nation's over-the-counter market. Jittery investors dumped shares on growing concerns that the wireless communications equipment maker will follow Procomp's step as Global Sun sharply trimmed its financial forecast as Procomp did, Wu said.

In early January, Procomp, which started out as a computer motherboard maker, said it would lose NT$786.86 million, or NT$2.23 a share last year, a far cry from the NT$169.25 million in earnings, or NT$0.48 gains per share, estimated previously.

Procomp in 2002 became Taiwan's largest maker of gallium arsenide epitaxial-based (GaAs) communications chips used in mobile phones. But Wu blamed the company's diversification into unfamiliar areas -- such as GaAs -- for the loss.

Waterland Financial Holdings (國票金控) was another victim of Procomp's default, amid concerns about possible financial links between the two companies, as chairman Walter Lin (林華德) is the husband of Procomp chairwoman Yeh Su-fei (葉素菲).

Shares of Waterland Financial tumbled 5.91 percent to NT$11.15 on the TAIEX.

In response to the pessimistic speculation about its financial state, Waterland said it has not granted any bank loans to Procomp and therefore will not sustain severe losses, company spokesman Stephen Tsai (蔡德夆) told the Taipei Times.

"The impact will be limited," Tsai said.

Waterland, a small player among the nation's 14 financial holdings companies, still needs to allocate about NT$25 million in losses, as the megabank indirectly owns Procomp equities and bonds, Tsai said.

Waterland Securities Co (國票證券), 55 percent owned by Waterland Financial Holdings, currently holds a combined NT$45.7 million of Procomp stock and bonds, according to Tsai.