Creditors of STS Semiconductor and Telecommunications Co. Ltd., the Korean parent firm of locally listed Phoenix Semiconductor Philippines Corp. (PSPC), has acceded to a grace period to ensure that STS continues to operate and improve its financial condition.
In a statement to the Philippine Stock Exchange on Friday, PSPC said the grace period which involves all the creditor banks of STS runs from June 25 to September 24.
The administrator of the joint proceedings is the Korea Development Bank, a principal creditor of STS.
“The joint administration proceedings aims to put in place a debt restructuring program that will assure that STS will have continued and efficient normal operations as an outsourced semiconductor assembly, test (OSAT) company, while improving its financial structure,” the disclosure read.
The debt restructuring program started while BKE&T Co. Ltd. – an STS affiliate which is also an OSAT company – has file for a financial rehabilitation.
STS was the guarantor of the loans incurred by BKE&T, but the loans became due and enforceable when BKE&T defaulted on its obligations.
BKE&T, an outsourced manufacturer of LCD front panels for smart and cellular phones, has incurred losses after its main customer Nokia suddenly dropped its orders.
The debt restructuring program of its parent STS will not affect the PSPC operations and financials, PSPC said.
PSPC is STS’s sole offshore unit that is publicly listed. The Philippine-based maker of DRAM chips mainly supplies electronics giant Samsung.