STATS ChipPac says not to proceed with capital reduction

SINGAPORE Tue Feb 17, 2009 5:54am EST

SINGAPORE Feb 17 (Reuters) - Singapore's chip-packaging and testing firm STATS ChipPAC (STTS.SI) said on Tuesday that it will not proceed with an exercise to reduce its capital because it was unable to obtain debt financing amid the financial turmoil.

Last year the company, which is majority owned by Singapore state investor Temasek [TEM.UL], delayed its planned benchmark dollar bond sale following an earlier announcement that it will buyback bonds.

The firm had initially been looking to raise as much as $1 billion in five-year bonds, but later pared down its expectations to a benchmark deal, typically of about $500 million. (Reporting by Saeed Azhar)