State-run banks yesterday declined to extend the deadline for Ching Fu Shipbuilding Co (慶富造船) to meet its repayment obligations, raising the prospect that the company’s contract to build six minesweepers for the navy would soon be terminated.
Termination of the contract could lead to NT$14.9 billion (US$496.57 million) in bad debts for state-run banks that participated in a syndicated loan to the troubled shipbuilder, the Ministry of Finance said.
The shipbuilder has also secured other questionable loans, such as a separate build-operate-transfer contract for a National Museum of Marine Biology and Aquarium project, bringing banks’ total exposure to the shipbuilder to about NT$20.51 billion, of which more than 70 percent is expected to be unrecoverable, the Financial Supervisory Commission said.
Photo: Fang Pin-chao, Taipei Times
Newly installed First Commercial Bank (第一銀行) chairman Ray Dawn (董瑞斌) and Bank of Taiwan chairman Joseph Lyu (呂桔誠) told the legislature’s Finance Committee that they would not allow an extension for Ching Fu to furnish a NT$7.9 billion advance payment bond as stipulated by its contract with the Ministry of National Defense.
The advanced payment bond is due on Friday, and the NT$35.85 billion minesweeper contract would be automatically terminated should Ching Fu Shipbuilding fail to provide the payment by Friday next week.
In light of Ching Fu’s financial troubles, the two state-run banks have ruled out preserving the contract, Lyu and Dawn said during a question-and-answer session at the legislature.
The shipbuilder has already missed a payment due last month, putting it in breach of contract, Lyu and Dawn said, adding that the company has not been making the required interest payments.
First Bank, which served as lead bank in the syndicated loan, will no longer help the shipbuilder salvage its project, Lyu said.
The Bank of Taiwan will vote against granting an extension as Ching Fu has yet to submit the required information, making it impossible for the bank and other lenders to verify its financial condition, Dawn said.
While a formal meeting with participating banks in the syndicated loan is to take place today, other lenders are expected to follow First Commercial Bank’s decision to cut its losses.
Separately, the Coast Guard Administration (CGA) on Sunday terminated its contract with Ching Fu as the shipbuilder has continued to fall behind in delivering 28 patrol boats and demanded NT$1.2 billion in compensation.
Ching Fu in May 2013 won a CGA tender to build 28 100-tonne patrol boats, and has completed and delivered 13 so far.
The CGA said the shipbuilder failed to meet Sunday’s deadline for delivery of the 14th boat after missing several deadlines earlier.
Ching Fu Shipbuilding chairman Chen Ching- nan (陳慶男) declined to answer reporters’ questions on his way to report to a police station in Kaohsiung, as he is required to do daily.
Chen was arrested in August and released on bail of NT$8 million in the case of suspected loan fraud linked to the minesweeper contract.
Additional reporting by CNA
ROLLER-COASTER RIDE: More than five earthquakes ranging from magnitude 4.4 to 5.5 on the Richter scale shook eastern Taiwan in rapid succession yesterday afternoon Back-to-back weather fronts are forecast to hit Taiwan this week, resulting in rain across the nation in the coming days, the Central Weather Administration said yesterday, as it also warned residents in mountainous regions to be wary of landslides and rockfalls. As the first front approached, sporadic rainfall began in central and northern parts of Taiwan yesterday, the agency said, adding that rain is forecast to intensify in those regions today, while brief showers would also affect other parts of the nation. A second weather system is forecast to arrive on Thursday, bringing additional rain to the whole nation until Sunday, it
LANDSLIDES POSSIBLE: The agency advised the public to avoid visiting mountainous regions due to more expected aftershocks and rainfall from a series of weather fronts A series of earthquakes over the past few days were likely aftershocks of the April 3 earthquake in Hualien County, with further aftershocks to be expected for up to a year, the Central Weather Administration (CWA) said yesterday. Based on the nation’s experience after the quake on Sept. 21, 1999, more aftershocks are possible over the next six months to a year, the agency said. A total of 103 earthquakes of magnitude 4 on the local magnitude scale or higher hit Hualien County from 5:08pm on Monday to 10:27am yesterday, with 27 of them exceeding magnitude 5. They included two, of magnitude
CONDITIONAL: The PRC imposes secret requirements that the funding it provides cannot be spent in states with diplomatic relations with Taiwan, Emma Reilly said China has been bribing UN officials to obtain “special benefits” and to block funding from countries that have diplomatic ties with Taiwan, a former UN employee told the British House of Commons on Tuesday. At a House of Commons Foreign Affairs Committee hearing into “international relations within the multilateral system,” former Office of the UN High Commissioner for Human Rights (OHCHR) employee Emma Reilly said in a written statement that “Beijing paid bribes to the two successive Presidents of the [UN] General Assembly” during the two-year negotiation of the Sustainable Development Goals. Another way China exercises influence within the UN Secretariat is
Taiwan’s first drag queen to compete on the internationally acclaimed RuPaul’s Drag Race, Nymphia Wind (妮妃雅), was on Friday crowned the “Next Drag Superstar.” Dressed in a sparkling banana dress, Nymphia Wind swept onto the stage for the final, and stole the show. “Taiwan this is for you,” she said right after show host RuPaul announced her as the winner. “To those who feel like they don’t belong, just remember to live fearlessly and to live their truth,” she said on stage. One of the frontrunners for the past 15 episodes, the 28-year-old breezed through to the final after weeks of showcasing her unique