ON Semiconductor's largest shareholder converts preferreds

By Angela McDaniels

Seattle, Nov. 11 - ON Semiconductor Corp. said that its largest shareholder, TPG ON Semiconductor Holdings LLC, has converted its series A cumulative preferred stock into common stock.

An 8% share premium of about 4 million shares of common stock will be issued to TPG ON Holdings LLC, an affiliated company of Texas Pacific Group, following appropriate clearance under Nasdaq Marketplace rules.

"The conversion of the preferred into common stock represents a major milestone for the company, reducing our indebtedness and improving our earnings profile to common stockholders," said ON senior vice president and chief financial officer Donald Colvin in a company news release.

The conversion removes $139.2 million currently considered as debt by the ratings agencies.

In the third quarter of 2005, preferred stock dividends totaled approximately $2.7 million.

The conversion will initially increase ON's shares of common stock outstanding by about 49 million, the company said.

Upon completion of the transactions, the company expects to have about 344 million fully diluted shares; Texas Pacific's ownership of the company's common stock will increase to 53.3%, or 165.2 million shares, from 52.7%, or 161.2 million shares

Wachovia Securities acted as the financial advisor to ON in connection with the transactions.

Phoenix-based ON supplies power solutions to the computer, cell phone, portable devices, automotive and industrial markets.

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