In a media briefing on Wednesday, Yiin said: “All we [the ministry] can do is request banks extend loan repayment dates or improve lending terms, but the government cannot help individual companies repay their debts to bondholders.”
“Doing so would make a terrible precedent to the public,” Yiin said.
Yiin yesterday reiterated that the government would make public its final and concrete industry consolidation plans by the end of this month, the statement said.
INSOLVENCY
An analyst said the NT$5 billion loan was crucial for ProMOS to avoid immediate insolvency.
“However, the amount is not enough for the company to pay off the debt,” Liu Szu-liang (劉思良), a chip industry analyst with Yuanta Securities (元大證券), said in a telephone interview yesterday.
With the new cash, ProMOS may be in a better position to persuade its bondholders to extend the payments, or to accept the payment in several installments, Liu said.
He said bondholder approval was highly likely as they could get higher returns after ProMOS improves its financial situation and operations.
On Thursday, the Financial Supervisory Commission (FSC) said ProMOS’ stock could be downgraded to the full-cash delivery class if it defaults on buying back its convertible bonds.
FSC Chief Secretary Lu Ting-chieh (盧廷劼) told a press conference that the predicament plaguing ProMOS was so deep and complicated that no government agency could handle it singlehandedly.
Lu said the company and its major shareholders should also draw up plans to help themselves, rather than count a bank bailout.
Meanwhile, ProMOS issued another statement on the Taiwan Stock Exchange, confirming the redemption date on Tuesday.
The original redemption date was today.
With the upcoming US President’s day on Monday, the first day for redemption is on Tuesday.
ECBs have a seven-day settlement after trade date, which means the company would not default until Feb. 26.
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