A banking syndicate was unable to give a new loan to struggling DRAM maker ProMOS, which needs the money to pay off bonds, due to unspecified new factors, the lead bank in the syndicate said on Monday.

"There are some new factors that have come up," Bank of Taiwan Chairwoman Susan Chang told reporters following extensive meetings to try to negotiate a loan for up to T$5 billion ($146 million) for ProMOS.

ProMOS has been scrambling for cash to help repay a T$11 billion European Convertible Bond (ECB) it issued on Feb. 14, 2007. But the DRAM maker said it will allow holders of the bonds to sell back the notes starting on Tuesday, as the struggling company scrambles to find money for the potential redemption.

"Every bank is going to have a board meeting today. If they can't reach a decision today, it might be too late for ProMOS to pay back the ECB," Chang said.

She added that the members of the syndicate were likely to reach a consensus later on Monday.

Earlier in the day, a banking industry source told Reuters that a group of domestic banks had agreed to hold off redeeming millions of dollars of the ProMOS ECBs they hold.

If ProMOS fails to get the new loan to repay the bonds, the company could also possibly breach some of the financial convenants of its previous syndicated loans, some banking sources said.

By: DocMemory
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