TAIPEI, April 5 (Reuters) - Taiwan’s Chimei Innolux will formally sign on Thursday an agreement with banks extending loan repayments, a source with direct knowledge of the matter said, offering some breathing space to the loss-making company as it struggles with weak demand and falling prices for LCD panels.
The agreement for the world’s No.3 LCD maker covers loans of some T$240 billion ($8.15 billion), with the proportion due this year and next to be rolled over until 2014 to 2016.
Chimei lost T$64.44 billion ($2.18 billion) in the 2011 full year, much wider than its T$14.84 billion loss in 2010, struggling like other panel makers with falling prices for panels but rising costs for investment in new technology.
Last month one of its banks said an agreement had been reached on the repayments.
Taiwan’s Ministry of Economic Affairs, looking to support one of the island’s main export industries, had lobbied banks earlier this year to seal a new debt arrangement for Chimei Innolux.
Basis Point, a Thomson Reuters news service, had reported that banks agreed on Jan. 20 to let Chimei Innolux postpone to the third quarter the repayment of T$5.6 billion ($189.2 million) in principal that matured on Jan. 9. ($1 = 29.4650 Taiwan dollars) (Reporting by Argin Chang; writing by Jonathan Standing)