Amkor Technology plans to use cash to pay off upcoming debt maturities

By Jennifer Lanning Drey

Portland, Ore., Nov. 29 - Amkor Technology Inc. is accumulating cash on its balance sheet and intends to pay off the $88 million of its 9¼% senior notes that will mature in February 2008, Oleg Khaykin, Amkor's chief operating officer, said during a presentation at the Credit Suisse Technology Conference held Thursday in Phoenix.

Khaykin said the company also feels it has enough time to accumulate cash to handle its next sizable maturity, which is $249 million of 7 1/8% senior notes due March 2011.

Amkor reported cash and cash equivalents of $335 million at Sept. 30.

"We are building strong financial track records to fund our future growth," Khaykin said.

Additionally, the company recently adjusted its business model to include a heightened level of analyses regarding capital spending, which has resulted in a more disciplined approach to investment decisions, he said. The company is concentrating capital in growth areas and consciously avoiding market segments that are not synergistic with its current asset base.

"Our objective is to continue to generate cash flow to such extent that we can replace our existing asset base as well as support sustainable, profitable growth going forward and, obviously, service our debt," Khaykin said.

Over the past two years, Amkor restructured its debt to decrease it by $300 million and significantly reduce interest expense, he said.

Amkor is a Chandler, Ariz.-based provider of semiconductor assembly and test services.

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