ProMOS Technologies Inc (茂德科技) has hired a financial consultant to help deal with its bond repayment problem as the cash-strapped computer memory chipmaker faces difficulty buying back a five-year overseas convertible debt that matured yesterday.
ProMOS is the nation’s third-largest maker of computer memory chips after Nanya Technology Corp (南亞科技) and Powerchip Technology Corp (力晶科技).
The Hsinchu-based chipmaker issued US$350 million in five-year overseas convertible bonds on Feb. 14, 2007, which bondholders could start redeeming yesterday, according to the bond prospectus.
As of Monday, the company faced US$57.11 million in outstanding bonds, ProMOS said in a statement yesterday.
ProMOS is unable to fully meet its debt obligation because the company has only about NT$200 million (US$6.76 million) in cash, while owing between NT$57 billion and NT$58 billion in a syndicated loan to more than 20 domestic state-run and private lenders.
ProMOS said its final repayment day for the convertible bonds was scheduled for Tuesday, according to the statement.
“ProMOS will retain KPMG Cooperate Finance as dealer manager for settlement with the -bondholders subject to the maturity of the convertible bonds outstanding,”the company said.
It remains unclear if bondholders this time would agree to sell back their investments to the company at a deep discount of the face value of US$1,000 each, as they did in 2009.
ProMOS, which supplies commodity DRAM, SDRAM, Mobile RAM and LCD driver IC products, stopped trading its shares on the GRETAI Securities Market (GTSM) in September last year after the company failed to submit its first-half financial report to the stock exchange before a deadline required by the Securities and Futures Bureau.
On Wednesday last week, the company submitted the financial report, which showed ProMOS posted a net loss of NT$8.68 billion, or a net loss per share of NT$3.41, on sales of NT$7.05 billion, for the first six months of last year, according to its stock exchange filing.
Operating net loss was NT$7.72 billion, with a negative operating margin of 109.42 percent during the six-month period, as the company was mired in an industry where DRAM prices plunged on sagging demand because of the economic downturn and a supply glut.
ProMOS posted a net loss of NT$18.07 billion, or a net loss per share of NT$7.07, in 2010, company data showed.
DRAM prices plunged to a record low last year, prompting speculation that major players might need to shift their focus to enhance competitiveness and that smaller players were on the brink of going out of business. Powerchip, for instance, has gradually exited the DRAM business, while ProMOS continues its debt restructuring talks with lenders.
Thus far, the company has accumulated NT$65 billion in debt, according to ProMOS chief financial officer Jessie Peng (彭卓蘭).