The four major creditors of Ting Hsin International Group’s (頂新集團) syndicated loan of NT$6.8 billion (US$214.2 million) need more time to decide whether to grant the conglomerate a grace period, state-run Mega International Commercial Bank (兆豐國際商銀), the banking arm of Mega Financial Holding Co (兆豐金控), said yesterday.
The comments came after the banks failed to reach a consensus on the matter before the loan is due today.
The loan was granted for Ting Hsin’s land development project in New Taipei City’s Sanchong District (三重).
Apart from Mega International, the three other banks are First Commercial Bank (第一銀行), Chang Hwa Commercial Bank (彰化銀行) and Taishin International Bank (台新銀行).
Ting Hsin has requested that the four banks extend the loan by six months, after its major affiliate in Taiwan, Wei Chuan Foods Corp (味全食品工業), failed to auction off the plot and its stake in a land development subsidiary earlier this week. Ting Hsin had set the floor price at NT$7 billion, which would have been sufficient to repay the bank loan.
After failing to reach an agreement yesterday, representatives of the four banks are scheduled to hold another round of discussions today.
Even if the four banks agree to extend the loan, most market observers said they expect the creditors to demand that Ting Hsin repay part of the loan as a condition.
The banks might also raise the interest rate again on the loan after the credit extension, due to rising credit risks, they said.
The interest rate has been raised by 60 percent since the outbreak of the latest adulterated oil scandal involving Ting Hsin, which seriously damaged the conglomerate’s reputation and businesses in Taiwan.
Various banks have already frozen credit to Ting Hsin and its affiliates due to the same concerns. The group has repaid more than NT$10 billion to domestic banks after the scandal.
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