Conexant announces comprehensive refinancing plan

NEWPORT BEACH, USA: Conexant Systems Inc. has announced a comprehensive refinancing plan designed to improve its balance sheet and address its liquidity needs.

The company expects that this refinancing plan will provide sufficient financial flexibility to tender for its outstanding 4 percent convertible subordinated notes due 2026 and to realize the benefits associated with its business and growth opportunities.

Conexant has priced $175 million of new 11.25 percent senior secured notes due 2015, and is launching an offering of approximately 14 million shares of its common stock.

The senior secured notes have already been placed with institutional investors, and the company expects to complete the equity offering in the next several days. The proceeds from these offerings, together with available cash, will be used by the company to tender for any and all of its outstanding $232 million convertible subordinated notes, which are “puttable” in March 2011.

Under the terms of a tender offer commenced today, holders of convertible subordinated notes will be offered par value in cash. The tender offer will be contingent upon the successful completion of the new debt and equity offerings and is expected to be completed by March 30, 2010.

“Last year we concluded the major operational restructuring of Conexant with the sale of our DSL business,” said Scott Mercer, Conexant chairman and CEO.

“Since then, completing the financial restructuring of our company has been one of our highest priorities. Once we successfully close our new debt and equity offerings and retire our convertible debt, we will have a stronger, more sustainable capital structure. At that point our company transformation will be complete, and we will be focused exclusively on driving profitable growth by expanding our market-leading position in solutions for imaging, audio, embedded modem, and video surveillance applications. In addition, we intend to use our core expertise in analog and mixed-signal design to take advantage of new opportunities in adjacent markets.”