SINGAPORE -- 06/19/08 --
UNITED STATES -- 6/19/2008 -- STATS ChipPAC Ltd.
("STATS ChipPAC" or the "Company") (SGX-ST: STATSChP) (SES: S24), a leading
semiconductor test and advanced packaging service provider, today announced
that it intends to pursue a debt financing plan in furtherance of its
proposed capital reduction exercise that was previously announced. The debt
financing is expected to consist of a private placement of senior notes
(the "New Notes") and senior secured credit facilities (the "New Credit
Facilities") comprising a term loan and a revolving credit facility. As
part of the debt financing plan, the Company has commenced a cash tender
offer and consent solicitation in respect of its $150 million of 7.5%
Senior Notes due 2010 and its $215 million of 6.75% Senior Notes due 2011
(collectively, the "Existing Notes"). The Company intends to use the net
proceeds from the private placement, together with borrowings under the
term loan, to (1) fund its proposed cash distribution to shareholders (if
the capital reduction is effected), (2) fund the tender offer and consent
solicitation and repay certain of its other indebtedness, (3) pay the costs
associated with the foregoing, and (4) for general corporate purposes.
Private Placement of New Notes
The Company intends to offer, subject to market conditions and other
factors, the New Notes to qualified institutional buyers pursuant to Rule
144A under the Securities Act of 1933, as amended (the "Securities Act"),
and to non-U.S. persons outside the United States in reliance on Regulation
S under the Securities Act. The New Notes are expected to consist of two
tranches and pay interest semi-annually. The New Notes are expected to
constitute senior, unsecured obligations of the Company and to be
guaranteed by certain wholly-owned subsidiaries. The Company has applied
for and expects to receive approval in-principle from the Singapore
Exchange Securities Trading Limited (the "SGX-ST") for the listing and
quotation of the New Notes.
The SGX-ST assumes no responsibility for the correctness of any of the
statements made or opinions expressed in this release. Admission of the New
Notes to the Official List of the SGX-ST is not to be taken as an
indication of the merits of the Company or the New Notes.
New Credit Facilities
Concurrently with the private placement of the New Notes, the Company
intends to enter into the New Credit Facilities for $450 million comprising
(1) a
three-year amortizing term loan (the "Term Loan") and (2) a three-year
revolving capital expenditure credit facility (the "Capex Facility"). The
Term Loan is expected to be for $300 million and the Capex Facility is
expected to be for $150 million. The New Credit Facilities are expected to
be guaranteed by all of the Company's wholly-owned subsidiaries (except its
China subsidiaries and STATS ChipPAC Korea Ltd.) and secured by
substantially all of the assets of the Company and its subsidiary
guarantors, except as prohibited by applicable law or the rules of any
applicable regulatory authorities. The Term Loan is expected to be drawn
down concurrently with the completion of the private placement. The Capex
Facility is expected to initially be unutilized.
Tender Offer and Consent Solicitation in respect of the Existing Notes
In addition, concurrently with the private placement, the Company has
commenced a cash tender offer for any and all of its Existing Notes. In
conjunction with the tender offer, the Company is also soliciting consents
of holders of the Existing Notes to adopt proposed amendments to the
respective indentures governing the Existing Notes that would eliminate or
modify substantially all of the restrictive covenants, certain reporting
obligations, certain events of default and certain other provisions under
the respective indentures.
The tender offer will expire at 5:00 p.m., New York City time, on Tuesday,
July 22, 2008, unless extended or earlier terminated (the "Expiration
Date"). Holders who validly tender their Existing Notes at or prior to 5:00
p.m., New York City time, on Wednesday, July 2, 2008, unless extended or
earlier terminated (the "Consent Deadline"), will receive the Total
Consideration (as defined below) and will be deemed to have delivered their
consents pursuant to the consent solicitation. Holders who validly tender
their Existing Notes after the Consent Deadline but on or prior to the
Expiration Date will receive only the Tender Consideration (as defined
below).
The following table provides information with respect to the Notes and
summarizes terms material to the determination of the applicable Total
Consideration and the applicable Tender Consideration, each as defined
below:
Series Common Codes/ Earliest Reference Fixed
of CUSIPs/ISINs Redemption Security Spread
Existing Price (in
Notes basis
points)
$150 022422669, $1,000 per 3.875% 50
million 022422642, $1,000 U.S.
of 7.5% 022457241/ principal Treasury
Senior 85771TAD6, amount Note due
Notes 85771TAE4, July 15,
due Y8162BAB1/ 2010
2010 US85771TAD63,
USY8162BAB19,
US85771TAE47
$215 020574089, $1,033.75 4.75% 50
million 020563532 per $1,000 U.S.
of 021811157/ principal Treasury
6.75% 85771TAA2 amount Note due
Senior 85771TAC8, November
Notes Y8162BAA3/ 15, 2008
due US85771TAA25,
2011 USY8162BAA36,
US85771TAC80
A. B. C.
Total Consent Tender
Consideration Payment Consideration
Existing Note $30 per Total
cashflow $1,000 Consideration
discounted at principal minus Consent
the yield on amount Payment
the applicable (A-B=C)
Reference
Security plus
the Fixed
Spread
$30 per
$1,000
principal
amount
The Company has the option to settle Existing Notes validly tendered at or
prior to the Consent Deadline on an early settlement date. If the Company
chooses to exercise this option, it will make an announcement of this early
settlement date.
The tender offer and consent solicitation in respect of each series of
Existing Notes is conditional upon, among others, (1) the Company obtaining
adequate debt financing to fund the tender offer and consent solicitation
and the proposed cash distribution on terms and conditions acceptable to it
and (2) the receipt of the consents from holders of a majority in aggregate
principal amount of the outstanding Existing Notes to amend the respective
indentures governing the Existing Notes. As described above, the Company
intends to fund the tender offer and consent solicitation with a portion of
the net proceeds from the private placement of the New Notes together with
borrowings under the Term Loan.
The tender offer and consent solicitation in respect of one series of
Existing Notes is not conditional upon the tender offer and consent
solicitation in respect of the other series of Existing Notes. The terms
and conditions of the tender offer and consent solicitation, including the
Company's obligation to accept and pay the applicable Total Consideration
or the applicable Tender Consideration, as the case may be, for Existing
Notes tendered, are set forth in the Company's Offer to Purchase and
Consent Solicitation Statement dated June 20, 2008 (the "Offer to
Purchase"). The Company may amend, extend or terminate the tender offer and
consent solicitation at any time.
The Company has appointed Credit Suisse and Deutsche Bank as the Dealer
Managers and Lucid Issuer Services Limited as the Tender and Information
Agent for the tender offer and consent solicitation. Requests for documents
may be directed to the Tender and Information Agent: Yves Theis or Sunjeeve
Patel, Tel: +44 20 7704 0880, Fax: +44 20 7067 9098,
statschippac@lucid-is.com. Any questions or requests for assistance
regarding the tender offer and consent solicitation may be directed to the
Dealer Managers:
Credit Suisse Securities (Europe) Limited
Liability Management Group
Tel: + 44 20 7883 6748 (London)
Credit Suisse (Hong Kong) Limited
Telephone: +852 2101 6000 (Hong Kong)
E-mail: liability.management@credit-suisse.com
Deutsche Bank AG, London Branch
Liability Management Group
Tel: + 44 20 7545 8011 (London)
Deutsche Bank AG, Singapore Branch
Tel: +65 6423 5342 (Singapore)
E-mail: liability.management@db.com
No Offering of New Notes and No Offer to Purchase Existing Notes
This release does not constitute an offer of any securities for sale in the
United States. The New Notes have not been and will not be registered under
the Securities Act, and may not be offered or sold in the United States
absent registration under the Securities Act or an applicable exemption
from such registration requirements.
This release also does not constitute an offer to purchase, a solicitation
of an offer to purchase, or a solicitation of tenders or consents with
respect to, any Existing Notes. The tender offer and consent solicitation
are being made solely pursuant to the Offer to Purchase and related
materials. Holders of the Existing Notes should read the Offer to Purchase
and related materials carefully prior to making any decision with respect
to the tender offer and consent solicitation because they contain important
information. Holders of the Existing Notes and investors may obtain a free
copy of the Offer to Purchase from the Tender and Information Agent or
either of the Dealer Managers specified above.
Italian residents or persons located in the Republic of Italy may not
tender Existing Notes and any offers to sell received from such persons
shall be ineffective and void. Neither this release nor any other offering
material relating to the tender offer and consent solicitation may be
distributed or made available in the Republic of Italy.
Forward-looking Statements
Certain statements in this release, including statements regarding the
proposed capital reduction and cash distribution, the terms of the debt
financing, the expected approval in-principle from the SGX-ST for the
listing and quotation of the New Notes, the completion of the private
placement and the New Credit Facilities, and the tender offer and consent
solicitation, are forward-looking statements that involve a number of risks
and uncertainties that could cause actual events or results to differ
materially from those described in this release. Factors that could cause
actual results to differ include, but are not limited to, general business
and economic conditions and the state of the semiconductor industry; level
of competition; demand for end-use applications products such as
communications equipment and personal computers; decisions by customers to
discontinue outsourcing of test and packaging services; our reliance on a
small group of principal customers; our continued success in technological
innovations; pricing pressures, including declines in average selling
prices; availability of financing; prevailing market conditions; our
ability to meet the applicable requirements for the termination of
registration under the Securities Exchange Act of 1934, as amended; our
ability to meet specific conditions imposed for the continued listing or
delisting of our ordinary shares on the SGX-ST; our substantial level of
indebtedness; potential impairment charges; delays in acquiring or
installing new equipment; adverse tax and other financial consequences if
the South Korean taxing authorities do not agree with our interpretation of
the applicable tax laws; our ability to develop and protect our
intellectual property; rescheduling or canceling of customer orders;
changes in our product mix; intellectual property rights disputes and
litigation; our capacity utilization; limitations imposed by our financing
arrangements which may limit our ability to maintain and grow our business;
changes in customer order patterns; shortages in supply of key components;
disruption of our operations; loss of key management or other personnel;
defects or malfunctions in our testing equipment or packages; changes in
environmental laws and regulations; exchange rate fluctuations; regulatory
approvals for further investments in our subsidiaries; majority ownership
by Temasek Holdings (Private) Limited ("Temasek") that may result in
conflicting interests with Temasek and our affiliates; unsuccessful
acquisitions and investments in other companies and businesses; labor union
problems in South Korea; uncertainties of conducting business in China and
other countries in Asia; natural calamities and disasters, including
outbreaks of epidemics and communicable diseases; and other risks described
from time to time in the Company's filings with the Securities and Exchange
Commission, including its annual report on Form 20-F dated March 7, 2008.
We do not intend, and do not assume any obligation to update any
forward-looking statements to reflect subsequent events or circumstances.
References to "$" are to the lawful currency of the United States of
America.
Disclaimer
This release has been issued by and is the sole responsibility of the
Company. In accordance with normal practice, Credit Suisse and Deutsche
Bank express no opinion on the merits of the debt financing or the tender
offer, nor do they accept any responsibility for the accuracy or
completeness of this release or any other document prepared in connection
with the debt financing or the tender offer.
About STATS ChipPAC Ltd.
STATS ChipPAC Ltd. is a leading service provider of semiconductor packaging
design, assembly, test and distribution solutions in diverse end market
applications including communications, digital consumer and computing. With
global headquarters in Singapore, STATS ChipPAC has design, research and
development, manufacturing or customer support offices in 10 different
countries. STATS ChipPAC is listed on the Singapore Exchange Securities
Trading Limited ("SGX-ST"). Further information is available at
www.statschippac.com. Information contained in this website does not
constitute a part of this release.
Investor Relations Contact:
Tham Kah Locke
Vice President of Corporate Finance
Tel: (65) 6824 7788, Fax: (65) 6720 7826
email: Email Contact
Media Contact:
Lisa Lavin
Deputy Director of Corporate Communications
Tel: (208) 939 3104, Fax: (208) 939 4817
email: Email Contact
