ProMOS Technologies Inc (茂德科技) closed limit-up yesterday after its creditors voiced support a day earlier for a plan to convert part of its debt into shares if it could secure a strategic partner and fresh capital.
The rescue plan, which still needs approval by the boards of its bank creditors and the Financial Supervisory Commission, will make the lenders the largest shareholder in the lossmaking computer chipmaker.
ProMOS’ share price jumped 6.45 percent to NT$0.66, outpacing the TAIEX, which gained 1.28 percent, after its creditors agreed in principle on Monday to the debt conversion plan and cut the interest rate to 0.1 percent, from the current 3.5 percent.
The Hsinchu-based company owes NT$57 billion (US$1.98 billion) in a syndicated loan involving more than 20 state-run and private lenders led by the Bank of Taiwan (台灣銀行).
Liu Teng-cheng (劉燈城), chairman of Taiwan Cooperative Bank (合作金庫), which has lent ProMOS about NT$8 billion, said the banks gave conditional approval to the debt conversion plan, estimated to be worth between NT$20 billion and NT$28 billion.
The group also agreed to lower the interest rate to 0.1 percent, rather than 0.5 percent as previously suggested, to further ease the burden on the cash-strapped company, Liu said.
“The package hinges on the introduction of a new strategic partner on the part of ProMOS,” Liu said by telephone. “Talks of a bailout attempt would be meaningless otherwise.”
Local media have reported that Japanese memory chipmaker Elpida Memory Inc could top the short list of potential candidates since ProMOS supplies DRAM chips to Elpida in exchange for technological support.
The troubled company would not comment on the reports after announcing a plan earlier this month to reduce its capital by 85 percent.
The strategic partner would play the role of a financial investor and help ProMOS develop technologies and new products, ProMOS spokesperson Ben Tseng (曾邦助) said. The firm has rejected plans to sell its 12-inch fab or seek insolvency protection.
The company is scheduled to hold an extraordinary shareholders’ meeting on Aug. 26 to approve the financial restructuring program.
The capital reduction and debt conversion plans need regulatory approval as banking regulations prohibit lenders from holding more than a 5 percent stake in non-financial firms.
Jean Chiu (邱淑貞), deputy director-general of the commission’s banking bureau, said it would be premature for the regulator to form an opinion before ProMOS and its lenders had finalized a settlement plan.
“An exclusionary measure might not be necessary if ProMOS finds a strategic partner and significantly boost its capital level,” Chiu said by telephone. “The FSC had better wait and see how things unfold.”
ProMOS’ quarterly losses narrowed to NT$4.26 billion in the first quarter of this year, compared with losses of NT$4.75 billion in the fourth quarter of last year.
Polytronics Technology Corp (聚鼎科技) yesterday announced that it is buying Henkel AG’s thermal clad dielectric material (TCLAD) business division for US$26 million as the Taiwanese firm aims to improve its technology, product portfolio and revenue performance. Polytronics, headquartered in the Hsinchu Science Park (新竹科學園區), is a supplier of protection components and heat dissipation materials. The firm entered the metallic heat-dissipation substrate market in 2007 and developed a unique solventless production process. Its board of directors approved signing an agreement with Henkel to acquire the German chemical firm’s TCLAD division in the US. The purchase includes all assets and business interests, including equipment,
ELECTRIC FARMLAND: TSMC’s proposal to clear 230 hectares of reforested land for what would become Taiwan’s largest photovoltaic solar farm has generated concerns New rules curbing solar farms built on agricultural land sparked fierce debate at a packed public hearing at the Legislative Yuan yesterday, with industry representatives saying that the new restrictions would endanger President Tsai Ing-wen’s (蔡英文) green energy goals, while agricultural officials emphasized the importance of protecting farmers and the environment. The Tsai administration has set a target to generate 20 percent of the nation’s power from renewable sources by 2025, by which time it also aims to install 20 gigawatts (GW) of solar power, including 6GW from rooftop solar systems and 14GW from ground-mounted solar farms. Although rooftop solar systems are
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday posted monthly revenue that suggested second-quarter sales surpassed analysts’ estimates, underscoring how its technological lead is helping the chipmaker weather the COVID-19 pandemic and US sanctions on its second-biggest customer Huawei Technologies Co (華為). Apple Inc’s main iPhone chipmaker posted sales of NT$120.88 billion (US$4.08 billion) for last month, up 40.8 percent year-on-year and bringing its revenue for the second quarter to NT$310.7 billion, beating the NT$308.8 billion analysts expected on average. TSMC, a barometer for the industry thanks to its heft in the global supply chain, had previously lowered its revenue outlook for this
‘SENSITIVE MARKETS’: The previously unannounced project would involve the company handing over control of data to a third party to sidestep privacy concerns Google has abandoned plans to offer a major new cloud service in China and other politically sensitive countries due in part to concerns over geopolitical tensions and the COVID-19 pandemic, two employees familiar with the matter said, revealing the challenges for US tech giants to secure business in those markets. In May, the search giant shut down the initiative, known as “Isolated Region” and which sought to address nations’ desires to control data within their borders, the employees said. The action was considered a “massive strategy shift,” said one of the employees, who added that Isolated Region had involved hundreds of employees