ChipMOS sells interest in Modern Mind and ChipMOS Shanghai to Thailin

HSINCHU, TAIWAN: ChipMOS Technologies (Bermuda) Ltd announced additional measures to streamline its corporate structure, which are designed to improve its profitability and better align with shareholder interests.

Since 2002, ChipMOS has managed its Mainland China operations, ChipMOS Technologies (Shanghai) Ltd , through its controlled subsidiary, Modern Mind Technology Ltd. Modern Mind is a company incorporated under the laws of the British Virgin Islands and is wholly-owned by Jesper Ltd, a company incorporated under the laws of the British Virgin Islands. While we do not own any equity interest in Modern Mind, we have controlled Modern Mind through our ownership of the demand notes issued by Modern Mind, convertible into common shares with a controlling equity interest in Modern Mind.

Under an assignment and assumption agreement signed on April 22, 2011, ChipMOS will sell the MMT Notes to ThaiLin Semiconductor Corp., a 42.9 percent-owned subsidiary of ChipMOS' 84.2 percent owned subsidiary, ChipMOS Technologies Inc. Proceeds to ChipMOS from ThaiLin will be $39.95 million. The completion of the Assignment Agreement is subject to a number of conditions, amongst others:
(i) the approval of the shareholders of ThaiLin, which is to be rendered in its next Annual General Meeting of shareholders scheduled on June 10, 2011; and
(ii) approval of the Investment Committee of Minister of Economic Affairs, R.O.C to allow ThaiLin, an ROC entity, to invest in China by converting the MMT Notes into the common shares of Modern Mind.

Post completion of Assignment Agreement transaction, ThaiLin is expected to immediately convert the MMT Notes into common shares of Modern Mind and purchase all of the remaining common shares of Modern Mind from Jesper, with ChipMOS Shanghai becoming a wholly-owned subsidiary of ThaiLin.

S.J. Cheng, chairman and CEO of ChipMOS, said: "This important, streamlining will be an accretive transaction to ChipMOS and will benefit our operating model and margin profile. Post transaction, there will be no change in how we report consolidated revenue from operations. We will continue to evaluate and pursue strategies that can further simplify our structure and increase return for shareholders."