Cheng Mei Materials Technology Corp (誠美材料), which makes key components and polarizers used in flat panels for TVs, yesterday said that it is seeking governmental approval to restructure NT$3.5 billion (US$113.61 million) to get its operations back on track.
The company attributed its financial difficulties to unresolved fights over the chairmanship.
Credit banks in January froze all credit lines to safeguard their obligations on rising concerns about the legitimacy of the company’s chairmanship, Cheng Mei said.
Founding chairman Ho Jau-yang (何昭陽) was deprived of his chairmanship on Jan. 14 in an extraordinary board meeting, controlled by then-vice chairperson Yeh Mei-li (葉美麗).
One month later, Ho regained his position as the court ruled that it was illegal to oust him from the board in the January meeting.
The fight is not yet over, as the company is scheduled to hold an extraordinary shareholders’ meeting on April 26 to elect new board members and a new chairperson.
“To get the credit lines, the company has to remove credit banks’ concern over the legitimacy of its chairperson,” company spokesman Lian Wei-chung (連巍鐘) told a media briefing in Taipei. “The credit banks refused to unlock the company’s credit lines in fear that the company’s board and chairperson will reshuffle again.”
Without the bankroll, Cheng Mei was facing mounting pressure to make payments to its raw material suppliers and to repay overdue short loans, Lian said.
The company’s operations have been severely affected by the debts, as it is running short of cash to buy raw materials, he said.
Cheng Mei hopes to be granted a grace period of three to six months to pay back loans amounting NT$3.5 billion, Lian said.
The company submitted an application to the Industrial Development Bureau after the board of directors approved the debt restructuring plan.
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