Pacific Construction Co (太平洋建設) yesterday reached an agreement with Hwa Nan Commercial Bank (華南銀行) whereby Hwa Nan will extend due dates for three checks -- worth a total of NT$550 million (US$16.61 million) -- that Pacific had bounced.
The arrangement will help Pacific in its efforts to avoid being delisted on the TAIEX stock exchange.
"All three bounced checks have been canceled and their due dates will be extended to the end of June and August," Chen Chin-hui (陳清暉), vice president of Pacific Construction's financial division, said.
According to Chen, Pacific also reached an agreement at a morning meeting yesterday whereby Hwa Nan will participate in a loan rollover plan that has already been endorsed by half of Pacific's 42 creditor banks.
According to the loan rollover plan, all banks involved in syndicated loan deals with Pacific have agreed to extend the due dates for the company's loans to 2008 and not to liquidate the company's collateral -- while lowering interest rates to 2.55 percent from nearly 3 percent.
According to the terms of the loan rollover plan agreed to at a meeting last year, Pacific Construction is required to use all of its earnings to repay debts to banks, Chen said.
Hwa Nan will soon participate with other creditor banks in a meeting at which Pacific Construction's repayment plan will be updated, Chen said.
"Pacific Construction currently owes banks NT$10 billion in total and plans to repay at least 19 percent of its debt, or NT$1.9 billion, by 2008," Chen said.
Pacific Construction spokesman Shen Pei-ling (
Shen said yesterday that the company has liquidated some of its assets to repay NT$12 billion in debt.
Shen said that, in anticipation of an economic recovery that the company hopes will be stronger than previously expected, the company has developed new land development plans intended to help its construction and its commercial real-estate businesses.
Shen thanked Hwa Nan yesterday for cooperating in the loan extensions, vowing to repair its damaged credit and business reputation so as to safeguard stockholders' interests.
According to Shen, Pacific Construction chairman Chang Min-chiang (
Shen said that Chang assured staff that he would do everything in his power to keep the business intact.
Shares of Pacific Construction declined yesterday by NT$0.45 -- its daily limit of 7 percent -- to close at NT$6.05.
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