Powerchip Semiconductor Corp (力晶) shares will be allowed to resume normal trading next week because the company has proven it is capable of solving its financial problems over a bond payment deal, the GRETAI Securities Market said yesterday.
In a statement issued after the closure of local stock markets, the over-the-counter GRETAI said it would lift the ban on margin trading of Powerchip stocks on Tuesday.
Shares of Powerchip, the nation’s biggest computer memory chipmaker, rose 5.45 percent to NT$2.9 yesterday, outperforming a 0.11 percent increase on the GRETAI index.
The stock was banned from margin trading on June 19 after the Hsinchu-based company failed to repay US$157.85 million worth of overseas convertible bonds on their due date, June 17.
The company didn’t have enough money to pay off the bonds so it negotiated with the bondholders to reset the terms, offering to pay US$400 in cash for every US$1,000 in bonds and convert the remaining US$600 in bonds into Powerchip common shares.
Powerchip has repaid 94.7 percent of its bondholders under the new terms, a payout equal to US$148.05 million, the GRETAI’s statement said.
The company has also deposited a lump sum of US$8.35 million in Mega International Commercial Bank Co (兆豐國際商銀) so that it can continue negotiating with the 5.3 percent of bondholders who had not agreed to the bond payment deal, the statement said.
Meanwhile, Powerchip will secure a short-term loan of NT$450 million (US$13.66 million) from local strategic partner Advanced Semiconductor Engineering Inc (ASE, 日月光半導體) to repay its debts, ASE said in a filing to the Taiwan Stock Exchange yesterday.
This new loan came after Powerchip secured a US$125 million loan from Powertech Technology Inc (力成科技) and Powertech’s largest shareholder, Kingston Technology Co, earlier this month to help repay bondholders.
ASE, the world’s largest chip packager and tester, said the NT$450 million loan could only be used to repay Powerchip convertible bonds it has subscribed.
The ASE filing said that Powerchip would use Rexchip Electronics Inc (瑞晶電子) common shares as collateral for the loan and would be required to pay back the loan a year from now.
Rexchip, a joint venture between Powerchip and Japanese memory chipmaker Elpida Memory Inc, makes computer memory chips at a 12-inch plant in Taichung.
Powerchip and ASE jointly own memory chip tester Power ASE Technology Inc (日月鴻).