New investor infuses $116.2M in PSPC’s parent company

Phoenix Semiconductor Philippines Corporation’s (PSPC) Korean parent company, STS Semiconductor & Telecommunications, Co. Ltd. (STS), has found a white knight to provide it with a US$116.32 million cash infusion.

In a disclosure to the Philippine Stock Exchange, PSPC said the STS board has approved the infusion of additional working capital by a new investor, SFA Inc. (SFA), through convertible bonds; bonds with warranty; and the issuance of capital shares from STS unsubscribed capital stock.

“The financial commitment will serve to support the operational infrastructure of the Group as it faces continued growth prospects,” said STS in a disclosure to the Korea Exchange.

The additional $116.32 million working capital consists of convertible bonds of worth US$25.9 million, that will be remitted to STS on August 10, 2015; bonds with warranty of about US$26.16 million to be remitted on August 10, 2015; and issuance of new shares worth US$64.27 million to be remitted on August 25, 2015.

Both convertible bonds and bonds with warranty are liabilities that may be converted to equity shares at the option of SFA. On the other hand, the issuance of capital shares from unsubscribed capital stock is to be treated as equity.

“Said infusion of additional working capital is in consequence of efforts by STS related to a voluntarily initiated joint administration proceedings that commenced last June 25, 2015,” said PSPC.

It explained that the proceedings aim to put in place a debt restructuring program that will assure that STS will have continued and efficient normal operations as an outsourced semiconductor assembly test (OSAT) company, while improving its financial structure.

STS owns 85 percent of the outstanding capital stock of PSPC. STS and PSPC continues to see positive growth with the capital infusion following a recent commitment from Samsung Electronics Co. Ltd. of continued business transactions with the Group.