Powerchip to encourage conversion of ECB to shares

Powerchip to encourage conversion of ECB to shares

The ECB will mature on February 2, 2010, and Powerchip Semiconductor Corporation has authorized Citigroup Global Markets to deliver invitations to the ECB holders for the conversion

Tuesday, January 19, 2010

TAIPEI, TAIWAN: Powerchip Semiconductor Corporation (PSC), the DRAM manufacturer based in Taiwan, has announced that it will encourage holders of its US $133-million zero-coupon euro convertible bond (ECB) to convert their issues into shares of Powerchip Semiconductor Corporation by offering cash compensation for the gap between the bond principal and the stock market value of shares.

According to a statement from Powerchip Semiconductor Corporation, the ECB will mature on February 2, 2010, and Powerchip Semiconductor Corporation has authorized Citigroup Global Markets to deliver invitations to the ECB holders for the conversion.

Since the conversion price of NT$15.87 per PSC share is much higher than the company’s stock price of NT$4.91 a share as on January 15, 2010, ECB holders could be unwilling to convert their ECBs. So Powerchip Semiconductor Corporation will offer cash to cover the gap between the conversion price and the market value of the shares to prevent the ECB holders from incurring losses from the conversion, the company said.

The deadline for the cash-compensated conversion of the ECB is 3 p.m. London local time on January 28, 2010. The reference stock price for computing cash compensation is the average of the closing stock prices from January 22, 2010, to January 28, 2010, according to Powerchip Semiconductor Corporation.

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