STS Semiconductor and Telecommunications Co. Ltd., the Korean parent of locally listed Phoenix Semiconductor Philippines Corp. (PSPC), was able to raise $116 million in fresh funds from an institutional investor.
The capital infusion was in the form of bonds and equities in line a joint administrative proceeding involving an STS affiliate.
The STS board of directors approved on Monday the infusion of additional working capital amounting to $116.41 million from new investor SFA Inc., PSPC said in a statement.
The capital infusion consists of $25.89 million of convertible bonds and $26.26 million of bond warranty in favor of STS, as well as $64.26 million of capital shares out of STS’ unsubscribed capital stock.
The bonds are STS liabilities that SFA may convert into equity, while shares from unsubscribed capital stock will be treated as issued equity.
“The said infusion of additional working capital is in consequence of efforts by STS related to a… joint administration proceedings that commenced last June 25, in order to put in place a debt restructuring program…” PSPC said.
The debt restructuring program is in line with the rehabilitation plan filed by STS affiliate BKE&T Co. Ltd. – also an OSAT company – whose loans were guaranteed by STS. The BKE&T loan became due and enforceable against STS upon default.
BKE&T, an outsource manufacturing contractor of LCD front panels for smart and cellular phones, has incurred losses from the sudden drop in product demand incurred by its main customer Nokia.
The joint administrative proceedings will not affect PSPC’s operations and financials, according to PSPC.
PSPC mainly makes memory chips—DRAM chips—for Samsung.