The cash-strapped Taiwan High Speed Rail Corp (THSRC,
Banks are now resuming the lending process after reevaluating THSRC's valuable collateral, officials with the consortium in charge of the loans said on condition of anonymity.
"We are in the process of evaluating the case with other interested banks," said an official at Taipei Fubon Bank (台北富邦銀行), the lead manager of the syndicated loan.
As it may take one or two weeks to complete the evaluation, the final results may not be available until next month at the earliest, the Taipei Fubon official said.
Besides Taipei Fubon, co-lead managers in the syndicated loan include Taishin International Bank (台新銀行), Ta Chong Bank (大眾銀行) and Fuhwa Bank (復華銀行).
Over 20 lenders are interested in partaking in the project, Taipei Fubon said. They reportedly include state-controlled Chang Hwa Commercial Bank (彰化銀行) and First Commercial Bank (
One of the banks involved in the deal said that THSRC, which is about to use up the funds it has on hand, will likely be granted the loan to help cover the capital gap. But the lender declined to be named, saying that too much exposure could again trigger a legislative uproar over the disputed loan.
Chinese Nationalist Party (KMT) Legislator Alex Fai (費鴻泰) and other opposition party lawmakers on March 30 questioned the legality of the rail company's loan application, citing insufficient collateral.
In response, THSRC's associate manager Ted Chia (
To assure the banks that the firm is solvent, THSRC invited more than 60 bank representatives that might be interested in participating in the loan to visit the company's facilities yesterday, including its Taichung station and Taoyuan operation center, which will be used as collateral for the loan, Chia said.
THSRC is about to use up its initial NT$323.3 billion syndicated loan, but has had difficulty obtaining new funds as legislators have questioned the legitimacy of government subsidies. Lawmakers charged that the subsidies violated the company's initial promise when it took on the build-operate-transfer project. Additionally, banks were worried about potential risks after the company delayed its service start-up for a year to October this year.
However, the banks may yet change their minds as the collateral offered by THSRC is expected to cover the risks.
The collateral facilities are estimated at some NT$400 billion, according to the Chinese-language Economic Daily News.
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