Powerchip converts $131.31 million of bonds due 2010, negotiates for remainder of two series

By Jennifer Chiou

New York, April 9 - Powerchip Semiconductor Corp. announced progress and continued conversion negotiations with holders of the following two series of its bonds: the original $150 million of zero-coupon convertible bonds due 2009 and original $130 million of zero-coupon convertible bonds due Feb. 2, 2010.

The company said that it accepted $131,311,000 of the convertibles due 2010 and has deposited the conversion payment for the converted bonds in an escrow account with the Bank of New York Mellon.

As of a month ago, holders of $121,201,000, or 90.8%, of the convertibles due 2010 had agreed to convert their bonds. On Feb. 4, the company said holders of 87.58% of the $133,467,000 principal amount at maturity of convertibles due 2010 had agreed to convert.

Powerchip said that as of March 31, $4.5 million of the convertibles due 2009 remains outstanding after most holders converted their bonds in 2009.

To induce conversion, the company offered a cash payment of about $740 for each $1,000 principal amount of bonds due 2010.

The cash payment was the difference between $1,000 and the market value of the shares issuable upon conversion determined using Powerchip's average closing share price over a period from Jan. 22 to Jan. 28.

The company reiterated that it would like to keep negotiating with the remaining holders of both series of bonds.

Hsinchu, Taiwan-based Powerchip makes memory products.

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