Rexchip Electronics Corp (瑞晶), a joint venture between Taiwanese DRAM chipmaker Powerchip Technology Corp (力晶) and Japan-based Elpida Memory Inc, may be delisted from the local emerging stock market, the GRETAI Securities Market said yesterday.
The GRETAI, which operates the local emerging stock market and the over-the-counter (OTC) market, said the delisting is likely after both Cathay Securities Co (國泰證券) and Grand Cathay Securities Corp (大華證券) terminated contracts to provide financial services to financially troubled Rexchip.
Under the current securities listing rules, an emerging stock needs two advisory securities firms to provide the necessary assistance for it to stay on the local bourse. The GRETAI said it is reviewing the situation before making a formal announcement about a delisting.
The departure of the two advisory firms reflects market concerns over Rexchip’s financial position as the global DRAM sector is in a down cycle amid weak demand and falling prices.
Rexchip is in talks with its creditors to roll over part of its loan portfolio. The firm has a NT$2.6 billion loan (US$89.04 million) due to expire on Nov. 20, but it has only about NT$500 million in cash and cash equivalents.
According to the Taiwan Stock Exchange, Rexchip had NT$20.77 billion in outstanding debt, including NT$15.59 billion in loans with a maturity of less than one year, as of the end of June.
Rexchip shares moved between NT$3 and NT$3.88 to close at an average of NT$3.66 on the emerging stock market yesterday, down from NT$3.83 the previous day.