Semiconductor firm facing ‘liquidity’ issue

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

However, the first Korean-owned company to list on the Philippine Stock Exchange told the bourse on Thursday that the financial woes of its parent firm “would not constrain local operations.”

“The PSPC management believes that this will not have a negative impact on PSPC’s business operations,” the firm said in a disclosure to the exchange.

Just the same, PSPC’s share price fell by 3.77 percent to close at P2.04 per share at the local stock exchange yesterday as investors priced in the financial woes of the company’s 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 owned shares and which had 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.

The disclosure stated that 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.”

As of the end of 2014, PSPC—one of Clark Freeport’s largest exporters—raised fresh equity to fund part of a $173-million factory expansion program.

The company plans to put up another manufacturing facility in the Philippines to expand its capacity. Doris Dumlao-Abadilla