Powerchip Semiconductor Corp (力晶半導體), the nation’s top computer memory chipmaker, received initial approval yesterday for a six-month extension on more than NT$63 billion (US$1.82 billion) in syndicated loans from major banks.
Powerchip’s bankers agreed to finalize by the end of this month their internal agreement to give a half-year grace period for the loans, said a Mega International Commercial Bank (兆豐國際商銀) official, who was familiar with the matter but declined to be named.
“In a meeting today [Thursday], Mega gave the go-ahead to the loan rollover. But the initial decision was to ask the board [of directors] for final approval later this month,” the Mega official said by telephone.
Mega lent Powerchip NT$5.93 billion, making it the biggest creditor bank, the official said.
“The approval will help ease the growing pressure [on management] to improve operations during this difficult time when every dynamic random access memory [DRAM] chipmaker is losing cash,” Powerchip spokesman Eric Tan (譚仲民) said by telephone.
The agreement will give Powerchip a half-year grace period for the principal payment on the loans, but its board will be restricted from receiving compensation or bonuses during this period, the Mega official said.
The chipmaker asked the government for help in getting a six-month extension on its bank loans late last year after posting NT$32.03 billion in net losses for the first nine months of the year.
Powerchip was also trying to secure enough funding to avoid defaulting on US$158 million in debt due in June, Tan said.
As of the third quarter of last year, Powerchip had NT$17.6 billion in cash and short-term securities, down from NT$24.7 billion during the same period of 2007.
Meanwhile, DRAM maker, ProMOS Technologies Inc (茂德科技), yesterday said it would buy back US$335 million in corporate bonds currently trading on Singapore Exchange Securities Trading Ltd.
More than 97 percent of investors wanted to excise the put option on the ProMOS bonds due this week, Promos said in a filing to the Taiwan Stock Exchange.
ProMOS would use the NT$3 billion it has secured from its creditor banks to pay the redemption.