Singapore-based semiconductor test and packaging service supplier STATS ChipPAC Ltd. today announced it will voluntarily delist its American Depositary Shares (ADSs) from the Nasdaq Global Select Market, terminate its American Depositary Receipts (ADR) program with Citibank (the depositary for the ADSs), and, if and when it becomes eligible to do so, terminate the registration of its ordinary shares and ADSs at the U.S. Securities and Exchange Commission (SEC).

Singapore Technologies Semiconductors Pte Ltd. (STSPL) and Temasek Holdings (Private) Ltd. filed with the SEC on October 16, that it may seek to cause Stats to voluntarily delist from Nasdaq or the Singapore Exchange Securities Trading Limited (SGX-ST), or both. As of October 15, STSPL, a wholly-owned subsidiary of Temasek, owned 84.1 percent of Stats stock.

In August, as a likely result of the takeover, STATS reported that five members of its board of directors had resigned.

In March, investment firm Temasek launched an offer worth approximately $1.6 billion for the remaining shares in STATS ChipPAC that Temasek's holding company, STSPL, did not already own. At that time, STSPL owned a 35.6 percent stake in the company. The firm came short of a total takeover, however. By mid-May, Temasek and STSPL had garnered a majority stake of 83.1 percent of the company, less than the 90 percent stake it needed to take STATS ChipPAC completely private by delisting it from the Singapore Exchange and the Nasdaq.

However, since that time, STSPL and Temasek continued to pursue the company.

Also as per the filing last month, STSPL may also seek to cause the company to deregister under the Exchange Act if it becomes eligible to do so. STSPL and Temasek have been discussing with the company the possible delisting from Nasdaq and the SGX-ST, termination of the company’s ADR program, and deregistration under the Exchange Act. STSPL, a wholly owned subsidiary of Temasek, currently owns approximately 83 percent of the ordinary shares (including ADSs) of the company.

STSPL and Temasek also disclosed in their Schedule 13D filing that STSPL intends to continue to seek to acquire additional ordinary shares and ADSs through open market purchases, privately negotiated transactions or otherwise, upon such terms and at such prices as STSPL shall determine.

Further, in accordance with the continuing listing rules of the SGX-ST, if STSPL submits a delisting proposal to the company to seek a voluntary delisting of the company from the SGX-ST, STSPL must offer all holders of outstanding ordinary shares (including ordinary shares represented by ADSs, if any) and outstanding convertible bonds issued by the company a reasonable exit alternative. This exit offer customarily provided to shareholders in such circumstances would be a cash offer to all shareholders to acquire their ordinary shares of the company. Any further purchases of ordinary shares and ADSs by STSPL or making the exit offer may facilitate the company’s satisfaction of the requirements for deregistration under the Exchange Act.

STSPL and Temasek disclosed in their SEC filing that STSPL intends to propose to the company to deregister under the Exchange Act if and when it becomes eligible to do so. In anticipation of the foregoing (which are discussed further below), the company intends to voluntarily delist from Nasdaq, terminate its ADR program, and if and when it becomes eligible to do so, deregister under the Exchange Act.

The company intends to file a notification of removal from listing on Nasdaq on Form 25 with the SEC on or about December 21.

The withdrawal of the ADSs from listing on Nasdaq should be effective 10 days after the filing of the notice on Form 25 with the SEC, unless the Form 25 is withdrawn by the Company prior to its effectiveness. Accordingly, the Company expects that the last day of trading of its ADSs on Nasdaq will be on or about December 31, 2007. The Company reserves the right to delay the filing of the Form 25 or later withdraw the Form 25 filing for any reason prior to its effectiveness.

The company has not arranged, nor is it planning to arrange, for the listing of the company’s securities on another U.S. securities exchange or for quotation of the company’s securities on any other quotation medium in the U.S.

Following the delisting of STATS’ ADSs from Nasdaq and the termination of the ADR program discussed further below, it is possible that an unsponsored ADR program could be established, in which case any such unsponsored ADSs would trade on the over-the-counter market.

STATS’ ordinary shares will continue to trade on the SGX-ST.

STATS said today in a statement that its board of directors made the decision to delist from Nasdaq, and deregister and terminate the company’s reporting obligations under the Exchange Act based on the following:

--  Following the completion of STSPL's tender offer for all outstanding ordinary shares, ADSs and convertible bonds issued by the company in May and subsequent purchases by STSPL, STSPL became the owner of approximately 83 percent of the issued ordinary shares of the company and the company's ADS Nasdaq trading volume has declined significantly; and

--  Considering the declining trading volume of the company's ADSs on Nasdaq, the company believes the costs associated with maintaining its Nasdaq listing and continuing with its U.S. reporting obligations outweigh the limited benefits of maintaining its Nasdaq listing and registration under the Exchange Act.

The company also noted that delisting from Nasdaq will not affect the listing status of its ordinary shares on the SGX-ST.

However, the SGX-ST may suspend the listing of the company's ordinary shares on the SGX-ST if STSPL, other substantial shareholders (i.e., shareholders who have an interest in 5 percent or more of the issued ordinary shares) and the company's directors, together with their respective associates (as defined in the SGX-ST Listing Rules), own in the aggregate more than 90 percent of the issued ordinary shares. STSPL currently owns approximately 83 percent of the issued ordinary shares of the company.

Further, STSPL and Temasek may seek to cause the company to voluntarily delist from the SGX-ST, and have also discussed with the company the possibility of the company voluntarily delisting from the SGX-ST.

Delisting from the SGX-ST would mean that shareholders who continue to hold the ordinary shares after such delisting would hold shares in an unlisted company, and it is likely to be difficult for such shareholders to sell their ordinary shares in the absence of a public market for the ordinary shares.

By: DocMemory
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