Bankers may bail out troubled Concord Construction (康和證卷) following "moral persuasion" by the Ministry of Finance (
Concord, which reportedly failed to make payments on NT$48 million in checks last week, is languishing under a protracted housing glut coupled with Taiwan's overall economic slowdown.
Local media quoted officials at Concord Construction as saying that the company wants its interest rate on existing loans to be reduced from 8 percent to 6 percent.
Analysts said that the com-pany has a monthly interest payment of around NT$2.5 million. Concord has also asked the creditors to roll over its debt, which totals NT$5 billion, for another six months.
Hwa Tai Bank (華泰) is the company's largest creditor, while the Land Bank of Taiwan (土銀) has also extended NT$560 million in loans to Concord, according to a Chinese-language daily.
Despite the loan restructuring agreement, the company may soon run into more trouble when another NT$450 million interest payment on its corporate bonds becomes due in July.
Concord has requested bankers not to withhold credit, although analysts said foreign banks may not be willing to comply given the bleak near-term prospects for the real-estate and construction sectors.
Bankers have been urging the construction firm to undergo major restructuring, which may include divesting a large amount of the company's assets.
Real-estate prices have risen rapidly since 1986 as the stock market expanded. With the share market plunging some 80 percent this year, property owners are refusing to sell their real estate cheaply. As a result, property prices have fallen just 20 percent after quadrupling in the late 1980s.
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