Debt-ridden First International Telecom Corp (大眾電信) yesterday received approval from a majority of its shareholders and creditors to go ahead with restructuring efforts, including a new US$100 million fund-raising plan.
First International Telecom, which provides mobile services — mostly voice calls using the short-range personal handy-phone system (PHS) technology — sank deep into debt in the fall of 2008. The company currently has NT$5 billion (US$155 million) in debt, with accumulated losses of NT$4 billion since the company’s inception in 1997.
To emerge from its financial woes, First International Telecom plans to slash its capital by 60 percent to NT$1.8 billion and to sell 2.1 billion special shares at NT$2 per share to potential investors at the same time, chief restructuring officer Jade Chang (張敏玉) said.
MOVING ON
“We have to raise new capital in order to move on,” Chang said.
She said it would be premature to disclose a short-list of potential investors, which may include the company’s major shareholders Taiwan Shin Kong Security Co (台灣新光保全) and FIC Global Inc (大眾全球投資控股).
The telecoms company hopes to complete the share offering by next quarter, Chang said, adding that the firm, which has 600,000 users, expects the Taipei District Court to approve the restructuring plan within four-and-a-half months.
CRUCIAL CASH
The fund-raising plan is crucial for First International Telecom to be able to deploy its 4G, or WiMAX, network as its voice-oriented PHS business wanes.
Chang said the company aims to return to profit in 2012 by providing new services integrating voice and data transmission on its WiMAX network.
YET TO LAUNCH
The firm is the only local WiMAX license holder that has yet to launch 4G services after it won a license to provide a high-speed data transmission service in the northern part of Taiwan, including Greater Taipei and Hsinchu.
Chang said the company is set to launch the service commercially in the second half of this year.
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