The creditor banks of food-scandal-plagued Ting Hsin International Group’s (頂新國際集團) affiliated developer yesterday decided not to extend a syndicated loan of NT$6.5 billion (US$204.73 million) and demanded full debt repayments within three days.
The move put extra liquidity pressure on the food conglomerate, as it owes NT$21.9 billion in bank loans to state-run lenders alone, with NT$12.7 billion due to mature by the end of the year.
“After several meetings, the creditor banks decided that Ting Lu Development Co (頂率開發) should pay off the syndicated loan within three days,” said Mega International Commercial Bank (兆豐國際商銀), the lead bank of the syndicated loan.
Photo: CNA
Otherwise, the lenders will seek an injunction, allowing the court to auction off its plot of land in New Taipei City and freeze the company’s bank deposits, a Mega official said by telephone.
The legal action should help the banks emerge from potential defaults unharmed, given that the land is valued at NT$20 billion, said Mega Bank, which accounts for NT$2.62 billion of the loan.
A loan extension would have required approval from all four creditor banks, which also include First Commercial Bank (第一銀行), Chang Hwa Commercial Bank (彰化銀行) and Taishin International Bank (台新銀行), the Mega official said.
“That did not happen,” the official said, without elaborating.
First Bank and Chang Hwa Bank lent NT$1.7 billion each and Taishin NT$770 million, according to the Ministry of Finance, the largest shareholder in all state-run lenders.
The developer, an affiliate of Ting Hsin that recently failed to secure a buyer for its plot of land in New Taipei City’s Sanchong District (三重), made a debt repayment of NT$200 million last month and another of NT$300 million on Friday, reducing the debt from NT$7 billion to NT$6.5 billion, the ministry said.
The ministry welcomed the creditor banks’ decision, saying it came in line with an Oct. 31 consensus among state-run lenders to deny credit to Ting Hsin and affiliates to punish it for its involvement in a series of food-safety scandals.
The ministry and Financial Supervisory Commission have urged domestic lenders to uphold “the equator principles” that bind financial institutions worldwide to deny credit for projects harmful to society and the environment.
“The ministry has not softened in its dealings with Ting Hsin,” Vice Minister of Finance Wu Tang-chieh (吳當傑) told a media briefing last night.
Ting Hsin has loans worth NT$40 billion in Taiwan and has to sell stakes considered less important after having difficulty securing credit. The group has repaid NT$6.1 billion debt since Oct. 31.
Ting Hsin issued a brief statement last night, saying it would discuss the debt repayment issue with the creditor banks.
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