Taiwan High Speed Rail Corp’s (THSRC, 台灣高鐵) financial reorganization plan was bogged down yesterday after it dismissed a suggestion by a bank syndicate that it seek new capital in conjunction with a proposed loan.
The syndicate, led by the Bank of Taiwan (臺灣銀行), told local media that THSRC should raise between NT$10 billion (US$304 million) and NT$20 billion in new capital — in addition to seeking bank loans — to improve its finances.
The company, which lost NT$25 billion last year, is seeking a syndicated loan worth NT$390 billion.
As of the fourth quarter of last year, THSRC’s long-term liability stood at NT$367.8 billion, including NT$342.2 billion in long-term loans, NT$25.4 billion in debt payable as well as NT$118.6 million in long-term notes and accounts payable.
Its total debt is NT$395.5 billion, including pension reserves and other debt, compared with NT$425 billion in total assets.
Officials from the Ministry of Transportation and Communications, the banks and THSRC had planned to discuss the reorganization proposal on Wednesday but postponed the meeting to focus on the aftermath of Typhoon Mokakot, local media reported yesterday.
Bank sources said the refinancing plan must be more cautious and prudent to attract potential lenders because the government is only willing to underwrite NT$308.3 billion.
Bank sources said an injection of new capital would do more to improve the company’s finances, but THSRC said such a move would distort its assets and operations.
THSRC spokesman Ted Chia (賈先德) said the company would have difficulty raising new funds because of high depreciation costs.
“Few people will invest money in a company with unreasonably high depreciation costs,” Chia said by telephone. “The proposal to raise new capital is unworkable. It doesn’t matter whether we like it or not.”
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