Powerchip to extend deadline for bond offer
TAIPEI, June 19 (Reuters) - Powerchip said late Thursday it would extend the deadline for bondholders to accept its offer to reset the terms of a $158 million convertible bond that matured on Wednesday, as it had yet to secure agreement from a sufficient number.
Powerchip (5346.TWO), Taiwan's biggest DRAM chip maker, said it would extend the deadline for bondholders to accept the offer to 1500 GMT on June 25, as some investors were still studying the proposal.
"(The extension) is to give bondholders who are not able to accept the proposal within the previous deadline another opportunity to accept the offer," Powerchip wrote in a filing to the Taiwan Stock Exchange.
Powerchip said 89 percent of investors holding the bond had so far agreed to accept its offer, just short of the 90 percent it needed.
The firm will be barred from margin trading on the Gre Tai Securities Market on Friday as it has failed to pay out the bonds, Gre Tai said.
Earlier this month it proposed a cash and equity swap plan, seeking to attract more investors to agree to convert the bonds at a lower share price as the company's shares have fallen sharply during the memory chip sector's worst-ever downturn.
Under the original terms, bondholders could start converting the bond issued five years ago into Powerchip shares at T$20.17 each from June 17. On Thursday, Powerchip shares dropped by their 7 percent daily limit, compared to a 0.83 percent fall on the main TAIEX share index.
The new tender will allow investors to convert the bonds into more Powerchip shares at a lower price based on Powerchip's average closing price in the five trading sessions from June 19-25.
Powerchip will offer bondholders $400 in cash and $600 worth of shares for every $1,000 in principal.
On Wednesday, Powerchip said Citigroup Global Markets, which it hired to negotiate with investors on the terms of the bond, had talked to 98 percent of investors.
Powerchip spokesman Eric Tang said Powerchip had about T$2 billion ($61 million) in cash available to pay out if investors agreed on the proposal. In April, ProMOS, Taiwan's third-biggest DRAM chipmaker, secured a T$2.98 billion loan from a banking consortium to help pay off a convertible bond it issued five years ago. (US$1=T$32.9) (Reporting by Baker Li and Rachel Lee, Editing by Jonathan Hopfner)
