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Ting Lu appeal for 6-month extension of loan rejected

Ting Lu appeal for 6-month extension of loan rejected

Taipei, Dec. 29 (CNA) The latest appeal by Ting Lu Development Co. for a six-month extension to pay back NT$6.5 billion (US$204.6 million) it still owes on a syndicated loan was rejected by creditor banks on Monday. Ting Lu, the real estate subsidiary of the Ting Hsin International Group, said it was willing to cooperate with creditor banks to the fullest extent, including having Ting Hsin and Ting Lu Chairman Wei Ying-chiao guarantee the loan in a personal capacity. In Ting Lu's latest proposal to extend the payment period, it offered to have the interest rate on the loan increased from the current rate estimated at around 2.2 percent to 4 percent, and Wei promised to repay NT$300 million per month over the six-month period, with the final installment set at NT$5 billion.
A spokesperson for Mega International Commercial Bank, the lead bank in the loan syndicate, said Monday that aside from Wei's personal guarantee, Ting Lu's latest proposal did not offer anything compelling, and the banks would stand by their decision Saturday to reject an extension. In addition, if no payments were made by Dec. 31, the syndicate would initiate legal action to freeze Ting Hsin's assets, the spokesperson said, adding that no further meetings would be called to discuss the matter. The Ting Hsin Group has been financially squeezed since it was embroiled in an edible oil scandal in October, in which subsidiaries were found to be making their oils with ingredients not fit for human consumption. Outraged consumer groups led a boycott of Ting Hsin's products and interests, and its other businesses were scrutinized, leading banks to tighten their loan terms to the group. Creditor banks sent a formal letter to Ting Lu on Dec. 27 demanding repayment of the NT$6.5 billion still outstanding by the end of the year, which Ting Lu received on Monday. The banks previously announced their intent to initiate legal action if Ting Lu did not repay the loan as requested, including filing injunction to seize Ting Hsin's assets and auctioning the loan collateral if repayment is not furnished. A parcel of land in Sanchong District owned by Ting Hsin affiliate Wei Chuan Foods Corp. is listed among the assets serving as collateral for the syndicated loan. Vice Finance Minister Wu Tang-chieh earlier estimated the value of the land at around NT$20 billion, which would easily cover a possible default on the loan by the conglomerate.
Ting Lu originally applied for the loan to finance the redevelopment of the idle land. (By Han Ting-ting and Ted Chen)


Updated : 2021-05-10 14:05 GMT+08:00