Powerchip Semiconductor Corp (力晶半導體), the nation’s largest maker of computer memory chips, has failed to obtain the approval of bondholders to adjust the payment terms of corporate bonds due next month.
In a filing to the Taiwan Stock Exchange yesterday, Powerchip said holders of the company’s US$158 million zero-interest overseas convertible bonds due on June 17 rejected the company’s request to change the payment terms.
The Hsinchu-based company approached bondholders on May 4 about adjusting the terms, including extending the conversion date to June 26 from June 17 and resetting the conversion price by June 26. The company hired Citigroup Global Markets Ltd to discuss the matter with bondholders.
Without approval, Powerchip will have to convert the corporate bonds into common shares at NT$20.17 per share under the original terms, undercutting the firm’s efforts to reduce its financial burden.
In late March, smaller rival ProMOS Technologies Inc (茂德) obtained the approval of a majority of bondholders to repay its overseas convertible bonds at a substantial discount to avoid defaulting amid increased losses.
The nation’s five major memory chipmakers, which also include Nanya Technology Corp (南亞), Inotera Memories Inc (華亞), ProMOS and Winbond Electronics Corp (華邦), reported record net losses of NT$154.3 billion last year as the sector faced its worst-ever glut, causing chip prices to plunge. Powerchip alone reported NT$57.53 billion in net losses last year.
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