Phoenix Semiconductor’s Korean parent firm seen facing “liquidity” issues

THE SOUTH Korea-based parent firm of Clark Freeport-based Phoenix Semiconductor Philippines Corp. (PSPC) is facing “liquidity” issues as an investee company had gone bankrupt and is now seeking court-assisted rehabilitation.

The first Korean-owned company to list on the Philippine Stock Exchange told the Philippine Stock Exchange on Thursday, however, that the financial woes of its parent firm won’t constrain local operations.

“PSPC management believes that this will not have a negative impact on PSPC’s business operations,” the company said in a disclosure to the Philippine Stock Exchange. Just the same, PSPC’s share price fell by 3.3 percent at the local stock exchange in Thursday’s morning trade as investors priced in the financial woes of the company’s Korean principal investor.

Korea Exchange-listed STS Semiconductor & Telecommunications Co. Ltd., which owns 85 percent of PSPC, disclosed in Korea that BKE&T Co. Ltd. (BKE&T) – where it owns shares of stocks and which has suffered financial losses from its operations, filed a rehabilitation plan with the Suwon District Court on June 17.

“STS, which has guaranteed BKE&T loans, may encounter liquidity issues due to the fact that all creditors of BKE&T will enforce their claims against STS as the guarantor to BKE&T’s loans,” the Korean disclosure said, an English translation of which was forwarded to the PSE by PSPC.

Considering that STS is under “normal” business operation, the disclosure said STS had petitioned for joint administration of the creditor financial institutions. This move was meant to enable STS to “secure its liquidity by an adjustment of liability repayment conditions and to repay the liability by formulating improvements in the financial structure.”