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TranSwitch abandons plans to exchange $80.519 million 5.45% convertibles for stock, cash
New York, Sept. 7 - TranSwitch Corp. said it has pulled its planned offer to exchange its outstanding $80.519 million of 5.45% Convertible Plus Cash Notes due September 2007 for up to 14,711,627 shares of common stock and up to $52,337,350 in cash.
The company was unable to reconcile the differing standards set by the Securities and Exchange Commission for certain exchange offers and those of the Nasdaq National Market for the listing of additional shares, TranSwitch said in an RW filing with the SEC.
Because the proposed exchange offer involved the issuance of common stock and cash in exchange for the Plus Cash Notes, the SEC "strongly indicated" that use of a 10-day moving average for establishing the stock price component of the exchange would be appropriate, the filing said.
But Nasdaq requires the use of the closing bid price on a single day that is two days before the completion of the exchange offer.
TranSwitch said it may carry out a private transaction instead.
As announced on June 17, TranSwitch had been proposing the exchange as part of an effort to reduce its debt.
It had intended that each $1,000 principal amount of convertibles would be exchanged for 182.71 shares plus cash to bring the total value to $999.99. However, the cash part will be capped at $650.00 so if the company's stock closes before $1.92 the value will not reach $999.99. Pricing would have been set on the second day before expiration.
Piper Jaffray & Co. was the lead dealer manager, and Thomas Weisel Partners LLC and Pacific Growth Equities, LLC were co-dealer managers.
Shelton, Conn.-based TranSwitch designs, develops and markets semiconductors for voice, data and video communications.
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