Powerchip Technology redeems remaining zero-coupon convertibles

By Angela McDaniels

Tacoma, Wash., June 30 - Powerchip Technology Corp., formerly Powerchip Semiconductor Corp., redeemed its $4.5 million outstanding principal amount of zero-coupon convertible bonds due June 17, 2009 and $2,156,000 outstanding principal amount of zero-coupon convertible bonds due Feb. 2, 2010 on June 30, according to company news releases.

The company originally issued $150 million of the convertibles due 2009 and $130 million of the convertibles due 2010. It later issued an additional $8.05 million of the convertibles due 2009 and $30 million of the convertibles due 2010.

Holders converted 96.5% of the convertibles due 2009 and 83.7% of the convertibles due 2010 prior to their respective maturities. The company had been in negotiations for the conversion of the remaining notes.

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

Hsinchu, Taiwan-based Powerchip makes memory products.

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