Powerchip to Be Relegated to Full-Cash Delivery Stock Tomorrow

Taipei, June 18, 2009 (CENS)--Powerchip Semiconductor, a leading DRAM (dynamic random access memory) maker, will be relegated to the category of full-cash delivery stocks, starting tomorrow (June 19), due to its failure to reach a settlement with holders of US$157 million (NT$5.2 billion ) worth of euro-dollar convertible bonds by the deadline on 10:00 p.m. yesterday (June 17).

Tan Chung-min, vice president and spokesman of Powerchip, reported to the GreTai Securities Market (over-the-counter market) yesterday the inability of the company to win the agreement of 90% of its ECB holders to validate its repayment proposal of 40% of cash and 60% of Powerchip stocks.

Powerchip is the second local DRAM maker to enter a talk with its corporate-bond holders for its inability to repay the debt upon its maturity, following ProMos Technologies.

It will be the third local DRAM maker witnessing its stock slipping into the realm of full-cash delivery stocks, following ProMos and Nan Ya Technologies. Of the five local DRAM makers, only Inotera Memories and Winbond Electronics are still spared of the fate at the moment.

Tan Chung-min pointed out that the company hopes to repay the ECB holders with NT$2.1 billion of cash and Powerchip stocks for the remaining debt, in order to lower the cash pressure on the company. As of the end of the first quarter, Powerchip still had NT$5.24 billion of cash in hand.