Taipei, Jan. 5, 2009 (CENS)--Creditor banks yesterday agreed to extend the grace period for their syndicated loan of approximately NT$50 billion (US$1.5 billion at US$1:NT$33) to ProMOS Technologies Inc. by half a year, the first loan-extension case for Taiwan`s DRAM chip-making industry amidst mounting calls for government`s rescues.

Executives of the banks pointed out that the extension was ratified based on the firm regularly making interest repayment. The firm was saddled with debts of around NT$50-60 billion (US$1.5-1.8 billion) as of the end 2008.

However, the banks are not inclined to offer the chipmaker fresh loans, which ProMOS is coveting for as fund for repaying the holders of its corporate bonds. Before the upcoming Chinese New Year, the company has at least US$320 million of mature convertible bonds to redeem.

Senior financial officials of the government pointed out that creditor banks would likely agree to extend the maturity of loans to DRAM chipmakers as long as they regularly repay interest on the loans that will mature by the end of March 2009 and their operations are normal.

If the chipmakers want to change conditions on approved loans once a six-month extension is not enough to solve their financial plight, they need to deliver rescue application to the Ministry of Economic Affairs, which will pass the applications to creditor banks after assessing the applications.

The ministry is assessing ProMOS` application for fresh money from creditor banks.

(by Ken Liu)