Lending extended by banks registered in Taiwan to two financially troubled companies — flat-panel maker Chunghwa Picture Tubes Ltd (中華映管) and multi-crystalline solar wafer supplier Green Energy Technology Inc (綠能科技) — has reached NT$16.9 billion (US$547.5 million), data released by the Financial Supervisory Commission (FSC) on Friday showed.
Data compiled by the commission’s Banking Bureau showed that 14 Taiwanese banks have extended loans to the two companies.
Secured loans made up 67 percent, or NT$11.4 billion, of the NT$16.9 billion in loans as of Nov. 30, while the remainder was unsecured loans, it showed.
The bureau said the 14 lenders are fundamentally sound.
As of the end of October, these banks raked in an average of NT$9.7 billion in pre-tax profit and there are no worries regarding their capability to bear the risks, the bureau said.
Chunghwa Picture Tubes and Green Energy, which fall under the corporate umbrella of conglomerate Tatung Co (大同), surprised the market on Thursday by announcing plans to seek bankruptcy protection or debt restructuring.
Chunghwa Picture Tubes, a maker of small and medium flat panels, has NT$34.8 billion in debt and reported a loss per share of NT$0.93 during the first three quarters of this year, while Green Energy’s total debt was NT$11.43 billion as of the end of third quarter, with a loss per share of NT$7.77.
FSC Chairman Wellington Koo (顧立雄) said the two firms’ financial troubles are expected to affect Tatung to some extent, but there are no signs that they have influenced other industries in Taiwan.
Shares of Chunghwa Picture Tubes on Friday fell 10 percent in Taipei trading to close at NT$1.17 per share and Green Energy shed 10 percent to close at NT$5.52, compared with the broader market’s 0.86 percent decline.
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