HONG KONG, DONGGUAN, CHINA & MILPITAS, USA: On September 22, 2009, ASAT Holdings Ltd, a global provider of semiconductor package design, assembly and test services, announced that its Board of Directors had commenced a formal process to seek strategic alternatives, which could include the sale of the Company or one or more of its subsidiaries.
The company has now reached an agreement with United Test and Assembly Center Ltd., a Singapore corporation, or its affiliates, to sell to UTAC all the shares in ASAT Ltd, the company's wholly owned subsidiary, which is itself the indirect parent of ASAT Semiconductor (Dongguan) Ltd, the only operating subsidiary of the company.
As part of the proposed transaction, UTAC will also purchase the rights to inter-company loans that have been made by the company and New ASAT (Finance) Ltd to ASAT Ltd. ASAT Finance is a direct subsidiary of ASAT Ltd and the issuer of the $150 million principal amount of 9.25 percent senior notes due 2011 that have been guaranteed by the company.
ASAT Ltd intends to transfer the outstanding shares of ASAT Finance to the company prior to completion of the sale, such that ASAT Finance will become a direct subsidiary of the company and will not be transferred to UTAC as part of the transactions set forth above.
The consideration for the Sale Process will be $44,643,887, subject to a downward post-closing adjustment of up to US$5,000,000, which is calculated on the basis of working capital, debt and certain additional factors.
As a result of the above transactions, the material assets of the company will consist only of the proceeds of the sale of the shares of ASAT Ltd and the company's loan receivable as well as the shares of ASAT Finance and the shares of Newhaven Ltd, a dormant British Virgin Islands company with certain dormant direct and indirect subsidiaries.
The assets of ASAT Finance will comprise of only the proceeds of the sale of the loan receivable of ASAT Finance. The liabilities of the company include its obligations as a guarantor under the Existing Notes and a borrower under a certain purchase money loan agreement, plus certain debts to professional advisors. The liabilities of ASAT Finance consist of its obligations as issuer of the Existing Notes.
It is the intention of the company as soon as possible after the completion of the sale process to appoint a liquidator and to enter into a members' voluntary liquidation under the laws of the Cayman Islands. The liquidator is expected to distribute the proceeds of the Sale Process to the stakeholders of the company and of ASAT Finance and then to wind up the company and ASAT Finance.
As the proceeds of the Sale Process will not be sufficient to satisfy the obligations of the Company and of ASAT Finance to their creditors, including the holders of the Existing Notes and the lenders under the PMLA, the Company does not believe that holders of ASAT's common stock and American Depository Shares will receive any proceeds from the distribution of assets upon liquidation (including the proceeds from the Sale Process).
The disposal of all or substantially all of the assets of the Company, as contemplated under the Agreement, will require the approval of the shareholders of the Company as an ordinary resolution. Notice will be sent to shareholders shortly informing them of the holding of an Extraordinary General Meeting for this purpose.
The completion of the Agreement is also subject to certain other conditions including the approvals of holders of a majority of the outstanding principal amount of the Existing Notes and of the PMLA lenders.