ProMOS Technologies Inc (茂德科技), the nation’s No. 3 computer memory chipmaker, yesterday won vital approval from creditors for a tender offer to buy back US$335 million in convertible bonds at a deep discount, avoiding a potential financial crisis.
Shares of ProMOS rose near the 7 percent daily limit, or 6.67 percent, to end at NT$0.96 yesterday after the announcement, which came minutes before the local stock market opened.
Cash-strapped ProMOS said “more than 79 percent of bondholders [who are not syndicated banks] have indicated their intention to accept the tender offer or withdraw their redemption request,” the company said in a statement.
That included those who agreed to an early-bird tender offer, ProMOS said.
Syndicated banks hold 12 percent of the company’s bonds.
The Hsinchu-based chipmaker intends to pay creditors who accept the offer no less than US$250 per US$1,000 principal amount of convertible bonds, the statement said.
“With the creditors’ approval, ProMOS will be able to take a breather from its unresolved financial problems. ProMOS has a rough ride ahead as it is still facing heavy pressure to survive this prolonged downturn,” said Liu Szu-liang (劉思良), a semiconductor analyst at Yuanta Securities (元大證券).
“Selling assets or equipment to state-controlled Taiwan Memory Co [TMC, 台灣記憶體公司] will be one of the few ways for ProMOS to remain in business,” Liu said.
TMC is expected to be launched within three to six months, the Ministry of Economic Affairs said earlier this month.
ProMOS yesterday also extended the offer for the third time and the deadline to Friday, from Feb. 14 initially.
The chipmaker intends to use NT$3 billion in syndicated bank loans to repay its debt. The company said it would finalize details with creditors to obtain the loans as soon as possible.
“ProMOS has jumped the first major obstacle by winning creditors’ approval for the offer. The credit banks will hold board meetings later [this week] to finalize the bank loans,” Tsai Fu-thi (蔡富吉), a spokesman at the Bank of Taiwan (台灣銀行), ProMOS’ biggest creditor, said by telephone.
With ProMOS having received the approval of 79 percent of its creditors, credit banks that hold the bonds are likely to follow suit, the chipmaker said in a statement last week.
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