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February 19, 2008 |
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FAR EASTERN: Seeks Bankruptcy Protection for Three Months Far Eastern Air Transport Corp. has sought bankruptcy protection for three months from the Taipei District Court to stop creditors from seizing the company's assets, various reports say. According to the company's Executive Vice President S.P. Kuan, the bankruptcy court's protection would allow the airline to continue operating and serve its customers while it seeks for ways to find funding to pay debts. Radio Taiwan International says that its liabilities amounted to NT$9.99 billion (US$315 million) at Sept. 30, 2007. Separately, AFP cites Unnamed sources as saying that the airline's bank debts have now reached more than US$5 billion. "By filing for bankruptcy protection we want to ensure passenger rights and prevent banks from seizing our planes, which would disrupt normal operations," Mr. Chang was quoted by the Wall Street Journal as saying. In a statement filed with the Taiwan Stock Exchange, the airline said that its debt-to-asset ratio was 87.43% as of January, making it difficult to pay its creditor group comprised of the Bank of Taiwan, Mega Bank, Taiwan Cooperative Bank, among others. The airline promised to settle payments within one month, as it expects to generate US$230 million through the sale of its non- core assets, AFP relates. Meanwhile, Far Eastern's membership with the International Air Transport Association was halted as of last week because of its inability to pay US$840,000 of overdue fees, the Journal states. Also, the airline owes Taiwan's Civil Aeronautics Administration about US$1.3 million for landing and airport fees. The Journal relates that the air carrier's troubles were brought on by high fuel prices and the presence of the high-speed rail service from Taipei to Kaohsiung. Because of the rail service, Far Eastern's sales dropped 7.7% in 2007, the China Post says. The China Post adds that Far Eastern's US$4.76 million check issued to its fuel supplier, CPC Corp., bounced. About Far Eastern Air Transport Headquartered in Taiwan, Far Eastern Air Transport Corporation is an airline company that provides both domestic and international passenger flight services. The Company also provides both domestic and international chartered flight services, freight and postal delivery services and aircraft maintenance services. D uring the year ended Dec. 31, 2006, domestic passenger flight service, international passenger flight service and chartered flight service accounted for approximately 53%, 18% and 18% of its total revenue, respectively. |
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