Powerchip Semiconductor Corp (力晶半導體), the nation’s biggest memory-chip maker, is seeking to revise terms on US$157.9 million of debt a week after smaller rival ProMOS Technologies Inc (茂德科技) won acceptance to buy back debt at a discount.
Powerchip plans to meet holders of the zero-coupon convertible bonds, which are due in June, in Hong Kong on April 16 “for a discussion with respect to alternatives available to the issuer to obtain greater financial flexibility under the bonds,” the Hsinchu-based company said in a statement on Wednesday.
The chipmaker joins ProMOS in seeking more favorable terms on existing debt as the industry experiences its worst decline.
ProMOS will pay US$0.25 on the dollar for its bonds after successfully revising the terms, while the Powerchip bonds were quoted at US$0.57 on the dollar yesterday, Mizuho Financial Group Inc prices on Bloomberg show.
Powerchip, which posted six straight quarters of losses through to September, raised US$158.1 million selling the notes in 2004, allowing investors to convert the bonds into its shares at NT$20.17 each, according to data compiled by Bloomberg.
The bonds were quoted at US$0.77 per dollar at the end of February, data show.
Powerchip had NT$16 billion (US$481 million) in cash and NT$15 billion in accounts payable at the end of the third quarter when it posted a NT$15 billion loss.
The company is expected to report a deficit of NT$13 billion for the fourth quarter and NT$12 billion in the first, according to the median of eight analyst estimates compiled by Bloomberg.
Powerchip spokesman Eric Tang said the proposed meeting in Hong Kong is to share information, declining to comment further on the matter. Citigroup Inc is financial adviser to Powerchip and Bank of New York Mellon Corp is trustee for the bondholders, said the statement, which was released through the Luxembourg stock exchange.