First International Telecom (Fitel), a PHS mobile telecom service operator, has applied for a court-approved corporate restructuring plan in order to protect its assets while maintaining operations, follow the recent uncovering of the company's financial difficulties.
Banks in Taiwan have continued to tighten Fitel's credit lines after the mobile service provider failed to honor checks worth NT$86 million (US$2.7 million) last week, according to company sources.
In addition, Fitel's major shareholders have also been reluctant to subscribe to new shares which are to be released through a planned private placement designed to raise new funds to help tide the company over its financial troubles, the sources added.
In order to prevent creditor banks from seizing its production equipment against loans due to banks, Fitel has applied for a court order to protect is properties, while maintaining its PHS mobile service, said the sources.
With a paid-in capital of NT$4.5 billion, Fitel's net worth has fallen to NT$1.5 billion, or around NT$3 per share, recently. The low net worth may undermine the company's efforts to raise NT$1 billion in new funds via the planned release of 200 million preferred shares at NT$5 per share, market watchers commented.
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