Monday, March 9, 2009
Singaporean foundry Chartered Semiconductor Manufacturing Ltd. has announced plans to raise about $300 million by way of a 27-for-10 rights offering to existing shareholders.
Singapore Technologies Semiconductors Pte Ltd., a wholly-owned subsidiary of Temasek Holdings, is set to subscribe for its pro-rata entitlement of 59.4 percent of offering and act as standby purchaser for up to approximately 90 percent of the offering, Chartered said. Temasek Holdings owns and manages the Singapore government's direct investments.
The rights issue is being offered at a 71.0 percent discount to Chartered's ADS closing price of $1.55 per ADS on March 6, 2009. The company said it expects to issue approximately 6,870 million ordinary shares, either directly or in the form of ADS shares.
As well as being backed by Temasek subsidiary ST Semiconductors, the offering is being underwritten by Citi, Deutsche Bank and Morgan Stanley, who are also the joint lead managers of the offering. The directors, including the CEO, of Chartered who are eligible to participate in this offering also intend to take up their entitlements under this offering in part or in full, the company said.
The offering is expected to be completed around mid-April 2009.
Chartered said in a statement that the reason for the rights issue was that availability of credit on reasonable terms was uncertain due to the depth and duration of the financial downturn.
The rights offering would strengthen Chartered's capital position, and provide additional liquidity to manage its maturing indebtedness, fund planned and future capital expenditures, and for general corporate purposes, the company said.
As of December 31, 2008, Chartereds cash balance was $594.1 million. In addition to its cash on hand, Chartered has credit facilities of approximately $1,007.9 million of which $750 million are credit facilities available for equipment purchase in Fab 7. On the same date, Chartered had obligations totaling US$2,106.4 million, consisting of US$1,840.5 million in debt and US$265.9 million in the form of convertible redeemable preference shares, that the company said are unlikely to be converted into ordinary shares.
By: DocMemory
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