Powerchip continues to negotiate conversion of zero-coupon bonds

By Angela McDaniels

Tacoma, Wash., March 10 - Powerchip Semiconductor Corp. said the holders of $121,201,000, or 90.8%, of its zero-coupon convertible bonds due Feb. 2, 2010 had agreed to convert their bonds as of Feb. 28.

On Feb. 4, the company said holders of 87.58% of the $133,467,000 principal amount at maturity of convertibles had agreed to convert.

To induce conversion, the company offered a cash payment of approximately $740 for each $1,000 principal amount of bonds converted.

The cash payment is the difference between $1,000 and the market value of the shares issuable upon conversion determined using Powerchip's average closing share price over a period from Jan. 22 to Jan. 28.

In addition, $4.5 million of the company's $150 million zero-coupon convertible bonds due June 17, 2009 remained outstanding as of Feb. 28.

The company would like to keep negotiating with the remaining holders of both series of bonds, according to company news releases.

Hsinchu, Taiwan-based Powerchip makes memory products.

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