Spansion Seeks Debt Protection in Japan
Spansion Inc. said it is in a reorganization proceeding under Japanese corporate law that will protect its Japan subsidiary from its creditors while it continues restructuring efforts. The NOR flash vendor also said it has begun discussions with a committee representing holds of $625M in notes due 2013. It operates a 300 mm fab in Japan.
Staff -- Semiconductor International, 2/10/2009
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Spansion Inc. (Sunnyvale, Calif.) said Monday it is in default for certain of its debt instruments, adding that its Japan subsidiary has entered into a reorganization proceeding under Japanese corporate law that will protect the Japan operation from creditors while it continues restructuring efforts.
Spansion’s 300 mm flash fab is located in Japan, and it operates a 200 mm facility in Austin, Texas. The company said the restructuring action “does not include any of Spansion’s other subsidiaries or their operations outside of Japan.” Spansion CEO John Kispert said, “We intend for Spansion Japan to continue to operate throughout the restructuring period,” and that it has enough cash to meet its short-term needs.
“Spansion Inc. does not expect the filing in Japan to materially affect its global operations,” the company said. “Spansion Japan Ltd. will continue its operations and intends to pay, in a timely manner, for all goods and services that it obtains after the date of filing.”
Spansion is in discussions with an ad hoc committee representing holders of its $625M senior secured floating rate notes due 2013 while the company goes about restructuring its balance sheet, also seeking “potential strategic transactions.”
“We are making progress in our constructive discussions with an ad hoc committee of secured noteholders, to find a mutually beneficial agreement as we seek to resolve Spansion's capital structures,” said Kispert, who joined Spansion as its president and CEO last week. The long-term is to “reach sustainable profitability and/or to successfully complete a strategic transaction,” he said.
On Jan. 20, packaging vendor ChipMOS Technologies announced that it would terminate a service agreement with Spansion. ChipMOS said Spansion owed ~$57M, ~$18M of which was in default.
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