AU Optronics Corp (友達光電) yesterday said it has sufficient capital to repay its bank loans after it obtained a new syndicated loan of NT$26.9 billion (US$911 million) last month.
AU Optronics’ comments came after the Chinese-language Commercial Times yesterday reported that the nation’s second-largest LCD panel maker was in talks with local lenders, led by Bank of Taiwan (台灣銀行), to borrow NT$30 billion to repay some of its bank loans that are due within a year.
“The company on Oct. 25 inked agreements to borrow NT$26.9 billion in syndicated loans,” chief financial officer Andy Yang (楊本豫) said in a statement.
As of the end of the previous quarter, AU Optronics had NT$40 billion in bank loans, with NT$70 billion in cash and equivalents, Yang told investors last month.
The company needs to pay back NT$56.8 billion within a year.
The company’s sales dropped by 4.7 percent quarter-on-quarter to NT$107.08 billion last quarter, with net profit down 37 percent sequentially to NT$2.49 billion, or earnings per share of NT$0.26.
Net debt-to-equity ratio improved to 70.3 percent last quarter, from 74.7 percent in the second quarter and 93 percent a year ago, the company said.
Innolux Corp (群創光電), the nation’s top LCD panel maker, last month said that it was in talks with local banks to restructure its NT$45 billion loans.
It said it expected to finalize the talks next quarter.
Innolux will have to pay back NT$65.35 billion in bank loans that are due in a year.
In the third quarter, Innolux reported sales of NT$97.1 billion, down 13 percent from the second quarter, with net profit declining 83 percent to NT$686 million, or earnings per share of NT$0.08.
The firm’s net debt-to-equity ratio reduced to 87.6 percent last quarter from 93.7 percent in the second quarter and 134.3 percent in the third quarter of last year.
State-run banks have lent NT$400 billion to the nation’s major LCD panel makers, Minister of Finance Chang Sheng-ford (張盛和) on Monday told legislators, who expressed concerns that state-owned lenders would have to write off bad debts if the borrowers defaulted.
Lenders were forced to write off massive bad debts after money-losing PC DRAM chipmaker ProMOS Technologies Inc (茂德科技) failed to pay back NT$23.93 billion in bank loans.
AU Optronics’ stock price declined 1.52 percent to NT$8.44 in Taipei trading yesterday, marking a third day of decline.
Shares in Innolux plummeted 2.1 percent to NT$9.79. The TAIEX inched up 0.84 percent.