Taiwanese banks have full collateral for the multimillion-dollar syndicated loan to an affiliate of Chinese solar energy conglomerate Hanergy Holding Group Ltd (漢能控股), which saw the shares of one of its subsidiaries tumble on Hong Kong’s main bourse last week, Financial Supervisory Commission (FSC) Chairman William Tseng (曾銘宗) said yesterday.
Hanergy Thin Film Power Group Ltd (漢能薄膜發電集團) shares tumbled nearly 50 percent on Wednesday last week, erasing more than NT$570 billion (US$18.65 billion) from its market capitalization.
That sparked concern over seven Taiwanese creditors’ syndicated loan to Hanergy Capital Ltd (漢能資本), another affiliate of Hanergy Holding.
In December last year, Hanergy Capital signed a contract for an US$82 million syndicated loan led by Taiwan’s Bank SinoPac (永豐銀行). Ten other banks, including six from Taiwan, participated in the loan. It was the first time lenders from both sides of the Taiwan Strait collaborated on a syndicated loan.
Tseng said that it is inappropriate to call the syndicated loan “a time bomb,” as Hanergy Capital has offered letters of credit from China’s Bank of Communications Co (交通銀行) and the Export-Import Bank of China (中國進出口銀行) guaranteeing up to US$79.54 million of the loan.
Moreover, Hanergy Thin is not facing any financial or operating problems, and the main concern stems from its drastic stock price decline, he said.
Tseng said the commission has asked Taiwanese banks to raise provisioning for their China exposure to 1.5 percent of their total Chinese loans by the end of this year, with the commission set to launch a more complete financial examination of their exposure to monitor the situation.
The commission conducted a stress test on domestic lenders’ exposure to China late last year, with the results showing that the local banking sector could withstand the pressure given a risk-based capital of above 8 percent, the minimum required by the government.
Tseng added that the controversy over the Taipei Dome (台北大巨蛋) project has made local banks and insurers more cautious about participating in syndicated loans for build-operate-transfer (BOT) projects.
State-run Mega International Commercial Bank (兆豐銀行) heads the NT$15.4 billion syndicated loan for the Taipei Dome, with superficies rights to the project.
That means if the Dome is not completed, government-owned banks participating in the loan will not be able to get a penny back.
In related news, Tseng said the timing of the US Federal Reserve’s policy rate hike remains a major uncertainty that would continue to affect the TAIEX’s trading momentum.
As of Thursday last week, portfolio investments by foreign investors stood at a net US$204.6 billion, marking a new record high, Tseng said, adding that the funds would flow into the local stock market “sooner or later.”
WASHINGTON’S INCENTIVES: The CHIPS Act set aside US$39 billion in direct grants to persuade the world’s top semiconductor companies to make chips on US soil The US plans to award more than US$6 billion to Samsung Electronics Co, helping the chipmaker expand beyond a project in Texas it has already announced, people familiar with the matter said. The money from the 2022 CHIPS and Science Act would be one of several major awards that the US Department of Commerce is expected to announce in the coming weeks, including a grant of more than US$5 billion to Samsung’s rival, Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), people familiar with the plans said. The people spoke on condition of anonymity in advance of the official announcements. The federal funding for
HIGH DEMAND: The firm has strong capabilities of providing key components including liquid cooling technology needed for AI servers, chairman Young Liu said Hon Hai Precision Industry Co (鴻海精密) yesterday revised its revenue outlook for this year to “significant” growth from a “neutral” view forecast five months ago, due to strong demand for artificial intelligence (AI) servers from cloud service providers. Hon Hai, a major assembler of iPhones that is also known as Foxconn, expects AI server revenues to soar more than 40 percent annually this year, chairman Young Liu (劉揚偉) told investors. The robust growth would uplift revenue contribution from AI servers to 40 percent of the company’s overall server revenue this year, from 30 percent last year, Liu said. In the three-year period
LONG HAUL: Largan Energy Materials’ TNO-based lithium-ion batteries are expected to charge in five minutes and last about 20 years, far surpassing conventional technology Largan Precision Co (大立光) has formed a joint venture with the Industrial Technology Research Institute (ITRI, 工研院) to produce fast-charging, long-life lithium-ion batteries for electric vehicles, mobile electronics and electric storage units, the camera lens supplier for Apple Inc’s iPhones said yesterday. Largan Energy Materials Co (萬溢能源材料), established in January, is developing high-energy, fast-charging, long-life lithium-ion batteries using titanium niobium oxide (TNO) anodes, it said. TNO-based batteries can be fully charged in five minutes and have a lifespan of 20 years, a major advantage over the two to four hours of charging time needed for conventional graphite-anode-based batteries, Largan said in a
Taiwan is one of the first countries to benefit from the artificial intelligence (AI) boom, but because that is largely down to a single company it also represents a risk, former Google Taiwan managing director Chien Lee-feng (簡立峰) said at an AI forum in Taipei yesterday. Speaking at the forum on how generative AI can generate possibilities for all walks of life, Chien said Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) — currently among the world’s 10 most-valuable companies due to continued optimism about AI — ensures Taiwan is one of the economies to benefit most from AI. “This is because AI is