HSINCHU, Taiwan, Nov. 9 /PRNewswire-Asia-FirstCall/ -- ChipMOS
TECHNOLOGIES (Bermuda) LTD. ("ChipMOS" or the "Company") (Nasdaq: IMOS) today
announced that ChipMOS TECHNOLOGIES INC. ("ChipMOS Taiwan"), a wholly-owned
subsidiary of ChipMOS, has completed the renegotiation of the terms of its
equipment leases with GE Money Taiwan Limited ("GE"), which also involves ING
Bank N.V., Taipei Branch ("ING") and ABN AMRO Bank N.V., Taipei Branch ("ABN"),
and EQUVO Pte. Ltd., Taiwan Branch ("EQUVO").
ChipMOS Taiwan and GE entered into a Master Lease Agreement on December 22,
2006, pursuant to which GE has leased equipment to ChipMOS Taiwan under a
series of lease agreements to satisfy the production capacity required for
ChipMOS Taiwan's business with Spansion LLC ("Spansion"). GE also entered into
certain financing agreements with ING and ABN for funding the leases. Due to
the global financial crisis and economic downturn, ChipMOS Taiwan initiated
the renegotiation with GE, ING and ABN in order to relax its cash outflow and,
after comprehensive discussions, the lease renegotiation has been concluded.
As a result of the renegotiation, ChipMOS Taiwan has agreed to continue
certain leases with GE and the other leases with GE have been assigned to
EQUVO, the new lessor, which has also assumed all corresponding financing
obligations of GE to ING and ABN. In addition, EQUVO has also agreed to extend
the rental payment schedules for the leases assigned to EQUVO.
The original leases provided the Company with options to purchase the
leased equipment at the expiration of the leases in the period from Q4, 2009
to Q4, 2010, and the Company believes that its operational planning may
require purchasing most of the leased equipment at that time. The
renegotiated leases have extended the lease terms from 3 to 5 years, and the
rental payments under the renegotiated leases have also been adjusted to cover
the residual value of the leased equipment. Under current accounting rules,
the operating lease accounting treatment will no longer apply and the
renegotiated equipment leases will be treated as capital leases. As a result,
a US$73.8 million capital expenditure is expected to be recognized in the
balance sheet of Q4, 2009. However, the US$73.8 million of capital
expenditure will not be immediate cash out flow in Q4, 2009. The payment will
be spread from Q4, 2009 to 2013 as shown in the table below. After the new
leases come into effect, rental payments will decrease by around US$2.8
million per month and depreciation will increase by around US$1.6 million per
month starting from December 2009 and extending until mid 2012.
Below is a comparison table to demonstrate the difference of cash out
flows under lease terms before and after lease restructuring:
Unit: US$ in million
2009 2010 2011 2012 2013 Totals
Cash Out - Original 48.1 67.7 7.8 -- -- 123.6
Cash Out -
Restructuring 45.1 31.2 27.0 18.3 1.8 123.4
Difference -3.0 -36.5 19.2 18.3 1.8 -0.2
The cash out flow amounts shown above include rental payments during lease
period and the payments for capital investment on the residual value of these
equipments which ChipMOS Taiwan plan to keep in house after termination of
lease. All U.S. dollar figures in this release are based on the exchange rate
of NT$32.03 against US$1.00 as of September 30, 2009.
About ChipMOS TECHNOLOGIES (Bermuda) LTD.:
ChipMOS (http://www.chipmos.com ) is a leading independent provider of
semiconductor testing and assembly services to customers in Taiwan, Japan, and
the U.S. With advanced facilities in Hsinchu and Southern Taiwan Science Parks
in Taiwan and Shanghai, ChipMOS and its subsidiaries provide testing and
assembly services to a broad range of customers, including leading fabless
semiconductor companies, integrated device manufacturers and independent
semiconductor foundries.
Forward-Looking Statements
Certain statements contained in this announcement may be viewed as
"forward-looking statements" within the meaning of Section 27A of the U.S.
Securities Act of 1933, as amended, and Section 21E of the U.S. Securities
Exchange Act of 1934, as amended. Such forward-looking statements involve
known and unknown risks, uncertainties and other factors, which may cause the
actual performance, financial condition or results of operations of the
Company to be materially different from any future performance, financial
condition or results of operations implied by such forward-looking statements.
Further information regarding these risks, uncertainties and other factors is
included in the Company's most recent Annual Report on Form 20-F filed with
the U.S. Securities and Exchange Commission (the "SEC") and in the Company's
other filings with the SEC.
Contacts:
In Taiwan R.O.C.
Dr. S.K. Chen
ChipMOS TECHNOLOGIES (Bermuda) LTD.
Tel: +886-6-507-7712
Email: s.k._chen@chipmos.com
In the U.S.
David Pasquale
Global IR Partners
Tel: +1-914-337-8801
Email: dpasquale@globalirpartners.com
