ASAT seeks consents needed from 9¼% noteholders to begin liquidation

By Angela McDaniels

Tacoma, Wash., Jan. 27 - ASAT Holdings Ltd. subsidiary New ASAT (Finance) Ltd. is holding a consent solicitation for its $150 million of 9¼% senior notes due 2011, according to a 6-K filing with the Securities and Exchange Commission.

The company is seeking consents to amend the indenture governing the notes in order to allow the sale of ASAT Ltd. to United Test and Assembly Center Ltd. The company plans to voluntarily begin insolvency proceedings once the proposed sale is complete.

The proceeds of the sale will constitute substantially all of the group's assets and will be distributed to the group's creditors.

ASAT estimates that noteholders will recover 20.5 cents or less on the dollar. This amount assumes that the sale is closed by Jan. 31.

But the company warned that whether or not it completes the proposed sale, it will not be able to discharge its financial liabilities in full, including the liabilities with respect to the notes.

The proposed amendments would amend the merger covenant, the limitation on the sale of assets covenant, the limitation on transactions with affiliates covenant, the change-of-control provisions and the substitution of successor provisions in the indenture.

The company needs consents from the holders of a majority of the notes in order to make the amendments.

The consent solicitation began Jan. 25 and will expire at 5 p.m. ET on Feb. 4.

Bank of New York Mellon is the tabulation agent.

ASAT is a provider of semiconductor package design, assembly and test services based in Hong Kong and Milpitas, Calif.

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