ProMOS extends tender offer for zero-coupon convertibles, amends offer price

By Angela McDaniels

Tacoma, Wash., March 23 - ProMOS Technologies, Inc. said it extended the early tender time and tender offer expiration for its $350 million principal amount of zero-coupon convertible bonds due 2012 to 9 a.m. ET on March 27 from March 21.

Holders of 79% of the convertibles have agreed to either tender their convertibles, not deliver put notices or, if put notices have already been given, revoke those notices.

Some of these bondholders have given non-binding indications of their plans rather than firm commitments. They have indicated they will submit firm instructions if the total consideration paid in the tender offer is at least $250 per $1,000 principal amount, according to a company news release.

In light of this, the company said it extended the offer and changed the payout to $265 per $1,000 principal amount for a success rate of 86% and to $250 otherwise. Previously, the payout was going to be $230 per $1,000 principal amount if the 86% success rate was not reached.

The company will not pay accrued interest.

The success rate is defined as the percentage of convertibles that has either been tendered, remains outstanding and has not been put back to the company or for which a previous put notice has been revoked.

A new put option gives bondholders the right to put the convertibles back at par on May 29 if the tender does not close by April 17.

The company's new lenders, a syndicate led by Bank of Taiwan, own $40 million of the convertibles and have indicated that they will not tender and will voluntarily revoke their right to exercise the new put option. Their holdings, 11.9% of the total outstanding, will not count toward the success rate.

The cash tender offer began on Feb. 19. The early tender deadline was originally scheduled for March 2 before being extended first to March 17 and then to coincide with the original offer expiration.

To be completed, the tender offer requires a success rate of 79%.

By tendering, holders will be deemed to have revoked the right to put the convertibles on Feb. 14. ProMOS said 97.4% of the convertibles had been put.

Funding for the tender will come from the new NT$3 billion syndicated loan facility arranged by Bank of Taiwan and secured against assets with a book value of NT$15 billion.

The dealer manager is Citigroup Global Markets Inc. (call Pamela Yeung at +852 2501 2695 or Timothy Wee at +852 2501 2134 or e-mail promos.tender.offer@citi.com). The information and tender agent is Bank of New York Mellon (fax 44 20 7964 6369 / 65 6883 0338 or e-mail gtsaprm@bnymellon.com with copy to gtsapta@bnymellon.com).

ProMOS is a Hsin-chu, Taiwan-based chipmaker.

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