Fri, Dec 17, 2010 - Page 12 News List

Freescale Semiconductor mulls IPO

Bloomberg

Freescale Semiconductor Inc, taken private in a US$17.6 billion buyout in 2006, may be ready for an initial public offering in the coming year, chief executive officer Rich Beyer said.

The Austin, Texas-based chipmaker has reorganized its debts and improved its performance, building “credibility in the marketplace,” Beyer said. If the economy continues to recover and the semiconductor industry grows next year, the company will be in a position to sell shares, he said.

“We believe that we will be in a position to do an IPO,” he said on Tuesday. “We have a capital structure that works.”

Freescale, the largest supplier of chips to US automakers, will aim to raise more than US$1 billion to pay down US$1.2 billion of debt coming due in 2014, Beyer said. The company piled on debt when it was taken private by Blackstone Group LP, Carlyle Group, Permira Advisers LLP and TPG Capital. Those investors won’t sell their own shares yet and will allow the company to raise cash with new equity in the IPO, Beyer said.

The company’s net loss narrowed to US$156 million last quarter, while sales jumped 29 percent to US$1.15 billion. It ended the quarter with US$1.07 billion of cash and paid out US$144 million in interest.

Freescale, which also supplies the main chips in Amazon.com Inc’s Kindle and Sony Corp’s Reader said the market for those devices hasn’t been hurt by Apple Inc’s iPad. Improvements in the reading experience they offer will continue to outpace that of more general tablets computers, Beyer said.

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