10.04.2001
Mosel strapped for cash

• Development: Mosel reports NT$14bn cash on hand. However, NT$10bn has been used as collateral to support firm’s convertible bonds and subsidiary loans. The remaining NT$4bn is earmarked for operations.

• Analysis: Net cash outflow (less depreciation costs) for Mosel in 1H01 was close to NT$2bn, but losses are expected to widen in 2H01. We suspect that Mosel will require additional cash resources to weather a long winter in the DRAM industry, as evidenced by historically low DRAM prices.

• Primasia View: We expect Mosel’s cash situation to worsen into the seasonal downturn with low visibility on future DRAM prices.