E Ink Holdings Inc (元太科技), the world’s leading e-paper display maker, yesterday said it has demanded that within three months, Sun Power Development and Construction Co (三寶建設) repay US$12.29 million of convertible bonds issued by Sun Power’s overseas unit.
E Ink subscribed to US$8.5 million of convertible bonds issued by Giant Crystal Universal Development Inc, a paper company set up in 2011 by Sun Power.
The bonds carried an annual coupon rate of 6 percent and initially matured on June 20 last year, but were extended for one year.
Sun Power requested a second extension on the debt, following Tuesday’s expiration.
Its board has not yet come to a decision over the debt extension, E Ink said.
The company said that it did not receive any payment on Tuesday and demanded that Sun Power pay US$12.29 million — which includes an annual interest rate of 10 percent — by Sept. 20.
Sun Power defaulted on the payment as the construction company’s planned sale of a commercial building in Shanghai stalled, E Ink said.
E Ink said it is seeking to sign an agreement with Sun Power on July 3 to make sure that it can reclaim the debts.
E Ink said it expects to receive an initial payment of NT$5 million (US$164,090) on that date.
E Ink said it also demanding that Sun Power add more collateral to its existing NT$4 billion worth, which mostly comprises real estate in Taipei
Sun Power’s default would not significantly impact its operations, as its debts only account for 1.4 percent of the company’s book value of NT$26.6 billion, E Ink said.
The default is connected to a series of loan scandals involving SinoPac Financial Holdings Co (永豐金控), which is alleged to have granted more than NT$5 billion in questionable loans to Sun Power.
No collateral was pledged for the loans.
E Ink is controlled by the nation’s leading papermaking conglomerate YFY Inc (永豐餘控股).
YFY Inc and SinoPac Financial were both founded by the family of former SinoPac chairman Ho Shou-chuan (何壽川), who has been detained by prosecutors over the scandal.
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