Debt-ridden ProMOS Technologies Inc (茂德科技) yesterday said its creditors have agreed to lower interest rates on about NT$57 billion (US$1.98 billion) in syndicated loans to the DRAM maker to 0.1 percent, according to a Taiwan Stock Exchange filing.
By cutting the interest rates from an average 3.5 percent to 0.1 percent during the period of June 1 until Dec. 31, ProMOS is now required to pay NT$4.48 million a month in interest, a significant reduction from the original NT$114.8 million.
ProMOS said the interest rates on its syndicated loans would return to their previous levels next year, in accordance to the terms the creditor banks set for various loans, the filing showed.
On June 22, the company applied to have its interest rates set by its creditors, led by the state-owned Bank of Taiwan (台灣銀行), lowered for the second half of the year in a move to ease its financial burden.
The move was given initial approval earlier last month, but the final decision was awaiting board approval from all of the firm’s lenders.
The Financial Supervisory Commission has previously said a total ProMOS default on its syndicated loans could add up to 0.71 percentage points to the banking sector’s bad-loan ratio.
On Tuesday, the commission’s latest non-performing loan data showed the bad loan ratio climbed for the second straight month to 0.51 percent in September as lenders started to account for defaults by ProMOS.
The 37 domestic banks saw non-performing loans increase by NT$10 billion in September to a total of NT$108.7 billion, with ProMOS contributing NT$10.8 billion, the commission said.
ProMOS shares were suspended on Sept. 6 on the over-the-counter GRETAI Securities Market, after the chipmaker failed to disclose its financial results on time, a requirement of all listed firms.
The company said on Monday it is still re-auditing financial reports for last year’s fourth quarter and this year’s first quarter, and until that process is complete, it is not able to furnish second and third-quarter results as mandated by the regulator.
According to regulations, ProMOS is at risk of being delisted if it fails to submit the financial reports within six months of its shares being suspended.
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