Esmertec to extend maturity, lower conversion price of some convertibles

By Angela McDaniels

Seattle, March 29 - Esmertec plans to amend the terms of its convertible bonds due 2008 and 2009 in order to increase its financial flexibility, according to a company news release.

Under the proposed terms and conditions:

• For one-third of the bonds, the conversion price will be reduced to CHF 13.00 from CHF 16.20, the maturity will be extended by one year and the non-conversion premium will be increased to 23.5% from 18.5% so that the overall yield will remain the same;

• For another one-third of the bonds, the conversion price will be reduced to CHF 11.00 from CHF 16.20, the maturity will be extended by two years and the non-conversion premium will be increased to 28.5% from 18.5% so that the overall yield will remain the same; and

• For the last third of the bonds, the conversion price, maturity and non-conversion premium will remain unchanged.

The company said it expects to receive confirmation of the changes from holders of 91% of the bonds in the next days.

Esmertec, a Duebendorf-Zurich, Switzerland-based provider of software and technology to communications device manufacturers and mobile telecom operators, sold CHF 23.5 million of the bonds via Bank Julius Baer & Co. Ltd. in October 2004.

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