ARM Purification

CLICK HERE: free registration for Semiconductor Today and Semiconductor Today ASIACLICK HERE: free registration for Semiconductor Today and Semiconductor Today ASIA

Join our LinkedIn group!

Follow ST on Twitter


20 March 2014

TowerJazz issues bonds to reduce debt through June 2015 by $55m

Specialty foundry TowerJazz (which has fabrication plants at Tower Semiconductor Ltd in Migdal Haemek, Israel, and at its subsidiaries Jazz Semiconductor Inc in Newport Beach, CA, USA and TowerJazz Japan Ltd) has signed definitive agreements with certain existing US and offshore institutional bondholders, pursuant to which Jazz Technologies Inc will issue new unsecured bonds due December 2018 in exchange for about $45m of the approximately $94m aggregate principal amount of 8% senior bonds due June 2015. The new bonds will be unsecured and are hence structurally subordinated to the Wells Fargo credit line of up to $70m due 2018, as are the currently outstanding bonds due June 2015.

In addition, certain of the participating bondholders have agreed to purchase about $10m principal amount of the new bonds maturing 2018.

TowerJazz says that these transactions will strengthen its balance sheet by reducing net debt due through June 2015 by about $55m, consisting of an increase of about $10m in its cash balance and a reduction of the bonds due June 2015 from $94m to $49m.

The new bonds (which will mature on 31 December 2018) carry an 8% coupon payable in cash in two semi-annual installments through maturity and may be converted into ordinary shares of Tower at $10.07 per share, reflecting a 20% premium over the average closing price for the firm’s ordinary shares for the five trading days ended one day prior to signing date of these agreements. The new Jazz bonds will not be guaranteed by Tower Semiconductor Ltd.

“This exchange and new note purchase with certain of our US and offshore existing bondholders is another vote of confidence from the investment community for our company and our long-term strategy,” says TowerJazz’s chief financial officer Oren Shirazi. “The $70m Wells Fargo credit line extension we signed a few months ago, together with this transaction, are instrumental in enabling TowerJazz to execute on its strategic growth plan and further improve our balance sheet and financial position,” he adds.

“This bond restructuring, together with the recently announced India cabinet decision on the 300mm fab establishment, the pending Panasonic joint venture which is expected to close within a few weeks, and our previously announced Q4/2013 year-over-year 25% organic growth, demonstrates a company actively making progress on its core business, creative M&A/joint venture, financials and balance sheet,” says CEO Russell Ellwanger. “The end result is a stronger company serving a continually growing customer base.”

Consummation of the transaction contemplated by the exchange and note purchase agreements is subject to certain routine regulatory consents and satisfaction of customary closing conditions. The new bonds will be issued at the closing of the exchange transaction (expected by the end of March).

Tags: TowerJazz SiGe

Visit: www.towerjazz.com

See Latest IssueRSS Feed