TransAsia Airways Corp’s (復興航空) creditor banks reached a consensus on Thursday night to take uniform steps prior to the end of February to protect their debts and assets.
The 22 banks reached the consensus after three hours of closed-door talks organized by state-run Mega International Commercial Bank (兆豐銀行), the largest creditor, which is owed NT$1.59 billion (US$49.78 million) from loans plus NT$500 million in convertible bonds.
Domestic banks have a total exposure of NT$11.06 billion in syndicated or regular loans to TransAsia, which on Tuesday, following a special board meeting, announced plans to dissolve its operations to curb losses.
TransAsia chairman Vincent Lin (林明昇) joined the debt settlement meeting on Thursday and offered to help liquidate its aircraft, Mega Bank said in a statement.
FLEET
The 65-year-old airline has a fleet of 16 airplanes, with some of them acquired through leasing arrangements.
Lin promised to assist with finding buyers with good offers in a prompt fashion and keep the aircraft operational, the statement said.
The proceeds from the sales of airplanes are to go toward servicing loans with collateral first and then to servicing unsecured debts, the statement said.
TransAsia took out a syndicated loan of NT$5.5 billion in 2011 to acquire two aircraft and entered other financing arrangements for other airplanes, the statement said.
Other creditors include Cathay United Bank (國泰世華銀行), Chang Hwa Commercial Bank (彰化銀行), Hua Nan Commercial Bank (華南銀行), Bank of Taiwan (臺灣銀行) and Yuanta Commercial Bank (元大銀行), it said.
INVENTORY
The creditors are to make inventories of TransAsia debt, whether it came with collateral or not, the statement said.
The airline issued US$75 million worth of convertible bonds three years ago in a bid to shore up its finances. Those are due on Tuesday next week.
The company has made it clear that it is unable to pay for the bonds due to a shortage of funding.
TransAsia had about NT$5.4 billion in net worth, or NT$7 per share, when the announcement to dissolve the company was made, Lin said.
BONDHOLDERS
Far Eastern International Bank (遠東銀行), Union Bank of Taiwan (聯邦銀行) and two other lenders also acquired convertible bonds, according to Financial Supervisory Commission data.
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