Taiwan Maritime Transportation Co Ltd (TMT, 台灣海陸運輸), a bulk shipper and energy transportation firm, has led its 23 single-ship companies to file for Chapter 11 bankruptcy protection in the US federal court in Houston, the company said yesterday.
The company said seeking court assistance would help it proceed with its financial restructuring, but several banks in Taiwan — which are creditors of the US-based shipper — have seized the company’s ships as collateral, which could raise uncertainties about the company’s fate.
Chapter 11 filing places a company under temporary court administration, meaning it does not have pay off all its debts at once, allowing it to generate new revenue during its restructuring.
“By using the Chapter 11 provisions, there is now a breathing space of 18 months to restructure the company,” TMT chairman Nobu Su (蘇信吉) said in a statement the Taipei Times received yesterday.
TMT’s decision follows that of several other global shipping companies, such as General Maritime Corp and Overseas Shipholding Group, the statement said.
These companies are also under restructuring to get over impact of the global financial crisis in 2008, which has dragged down freight rates. TMT said it was no exception following the global economic slowdown of recent years.
TMT has recruited restructuring experts, including AlixPartners and Bracewell and Giuliani, to offer advice to TMT, Su said.
However, Taiwanese banks’ seizures of the company’s ships have blocked all chances of the company generating income, making it difficult to pay banks, wages to crew and to buy fuel, he said.
In the statement, Su called on assistance from the government to mediate the process of debt reorganization between TMT and its major creditors in Taiwan, adding that he met Ministry of Economic Affairs representatives earlier this week to discuss the matter.
For its major creditors in Taiwan, TMT’s bankruptcy filing could cause a spike in the nation’s non-performing loans this year, severely undermining the banking sector’s profitability.
Taiwanese banks have seen their non-performing loans increase by NT$5.7 billion (US$188.24 million) to NT$100 billion in April from a month earlier, mainly because of TMT’s bad debts, according to data provided by the Financial Supervisory Commission (FSC).
TMT did not disclose its debt position yesterday. Local media reports said the company’s total debt as of the end of April was about US$800 million.
First Commercial Bank (第一銀行) is the company’s largest creditor in Taiwan, with total loans of about US$120 million, followed by Mega International Commercial Bank (兆豐國際商銀) with US$96 million and Shanghai Commercial & Savings Bank (上海商業儲蓄銀行) with about US$80 million, the reports said.
TMT said the company has met with its major creditors in Taiwan several times, but failed to reach a consensus extending and restructuring debt.
ADVANCED: Previously, Taiwanese chip companies were restricted from building overseas fabs with technology less than two generations behind domestic factories Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), a major chip supplier to Nvidia Corp, would no longer be restricted from investing in next-generation 2-nanometer chip production in the US, the Ministry of Economic Affairs said yesterday. However, the ministry added that the world’s biggest contract chipmaker would not be making any reckless decisions, given the weight of its up to US$30 billion investment. To safeguard Taiwan’s chip technology advantages, the government has barred local chipmakers from making chips using more advanced technologies at their overseas factories, in China particularly. Chipmakers were previously only allowed to produce chips using less advanced technologies, specifically
BRAVE NEW WORLD: Nvidia believes that AI would fuel a new industrial revolution and would ‘do whatever we can’ to guide US AI policy, CEO Jensen Huang said Nvidia Corp cofounder and chief executive officer Jensen Huang (黃仁勳) on Tuesday said he is ready to meet US president-elect Donald Trump and offer his help to the incoming administration. “I’d be delighted to go see him and congratulate him, and do whatever we can to make this administration succeed,” Huang said in an interview with Bloomberg Television, adding that he has not been invited to visit Trump’s home base at Mar-a-Lago in Florida yet. As head of the world’s most valuable chipmaker, Huang has an opportunity to help steer the administration’s artificial intelligence (AI) policy at a moment of rapid change.
TARIFF SURGE: The strong performance could be attributed to the growing artificial intelligence device market and mass orders ahead of potential US tariffs, analysts said The combined revenue of companies listed on the Taiwan Stock Exchange and the Taipei Exchange for the whole of last year totaled NT$44.66 trillion (US$1.35 trillion), up 12.8 percent year-on-year and hit a record high, data compiled by investment consulting firm CMoney showed on Saturday. The result came after listed firms reported a 23.92 percent annual increase in combined revenue for last month at NT$4.1 trillion, the second-highest for the month of December on record, and posted a 15.63 percent rise in combined revenue for the December quarter at NT$12.25 billion, the highest quarterly figure ever, the data showed. Analysts attributed the
Taiwan Semiconductor Manufacturing Co’s (TSMC, 台積電) quarterly sales topped estimates, reinforcing investor hopes that the torrid pace of artificial intelligence (AI) hardware spending would extend into this year. The go-to chipmaker for Nvidia Corp and Apple Inc reported a 39 percent rise in December-quarter revenue to NT$868.5 billion (US$26.35 billion), based on calculations from monthly disclosures. That compared with an average estimate of NT$854.7 billion. The strong showing from Taiwan’s largest company bolsters expectations that big tech companies from Alphabet Inc to Microsoft Corp would continue to build and upgrade datacenters at a rapid clip to propel AI development. Growth accelerated for
RSS