06.18.2001
Tuntex attempt to restructure subsidiary foiled

• Development: Tuntex Group not able to attain full consensus from Taiwan banks for request to restructure one of its unlisted subsidiaries.

• Analysis: First Commercial Bank has largest exposure to group, with loans amounting to NT$2b. Consequently, we expect First Commercial’s overdue loans to increase.

• Primasia view: We believe First Commercial Bank still has more than NT$6b of restructured debts to problematic enterprises, which maybe classified as bad debts in future. Therefore, we are less sanguine on the stock’s prospects.

WilliamFong@Primasia.com +886-[0]2-2547-8864