First International Telecom Mired in Financial Trouble

Taipei, Sept. 2, 2008 (CENS)--First International Telecom (FITEL), a low power-factor Personal Handyphone System (PHS) operator, saw its financial trouble surface yesterday (Sept.1), as NT$10 million worth of its checks bounced.

FITEL was unable to honor its checks, following its failure to have its two major shareholders, FIC Global and Shin Kong Group, subscribe to the company's capital increment via private placement. The project aims to raise NT$1 billion of fresh capital via issuing new preferred shares at NT$5 per share.

The company's survival will hinge on the attitude of the two major shareholders in the next one week, when it can cancel the record of bounced checks in the grace period. Also at stake is the interest of the company's some 1 million subscribers.

FITEL now owes NT$3.4 billion of banking loan, including NT$2.4 billion of long-term syndicated loan arranged by Taishin International Bank, with the remainder being short-term loans. It also owed some connection fees to Taiwan Mobile and was turned down by the National Communications Commission (NCC) for its request paying the NT$20.3 million franchise fee and NT$19 million frequency utilization fee in installments.

With paid-in capital of NT$4.5 billion, the company suffered NT$790 million of loss in 2007 and NT$520 million of loss in the first half this year.

FITEL was founded in 1997 by Ming J. Chien, chairman of FIC Global and First International Computer, as well as son-in-law of Y.C. Wang, founder of Formosa Plastics Group. Chien and FIC Global own 27.2% stake in the company, followed by Shin Kong Group with 19.3%. Other shareholders include United Microelectronics Corp. (UMC), SECOM Security, Inventec Appliance, Wistron NeWeb, and Loyal Chemical.