ChipMOS receives approval for extension of repayment schedule on short-term bank loans from Taiwan bank creditors

HSINCHU, TAIWAN: ChipMOS Technologies (Bermuda) Ltd announced that the company's 88.96 percent subsidiary ChipMOS TECHNOLOGIES INC. has reached agreement with and received approval from its bank creditors for an extension of its repayment schedule on its short-term loans.

S.K. Chen, chief financial officer of ChipMOS, said: "We appreciate the continued support of our bank syndicate in reaching this extension agreement. Our goal is to continue to pay down debt in 2011 and subsequently on a repayment schedule anticipated to reduce total debt to less than US$300 million by the end of 2011. This is another step in our ongoing efforts to strengthen our financial position, while concurrently providing the excellent test and assembly services customers rely on ChipMOS for."

The key extended repayment terms and conditions include agreement by ChipMOS Taiwan to repay 20 percent of the outstanding non-revolving short-term loans principal on December 31, 2010 and to repay the balance in eight quarterly installments by the end of 2012.

ChipMOS Taiwan will be required to set aside NT$50 million per month with Bank of Taiwan from January 2011 until December 2012 to fund the scheduled estimated principal repayments. ChipMOS Taiwan can maintain its current revolving short-term facilities, which as of December 29, 2010 had an aggregate outstanding principal amount of $25.2 million, but will be required to increase the collateral to secure up to 60 percent of the outstanding principal amount by the end of 2011.

For repayment of long-term loans, ChipMOS Taiwan also has agreed to set aside with Bank of Taiwan NT$300 million per month for 2011, NT$270 million per month for 2012 and NT$150 million per month for 2013 to meet the principal repayment schedule.

The bank creditors have agreed that ChipMOS Taiwan may arrange additional bank loans for purchasing operating materials by using its available assets as collateral; and also have agreed to not unilaterally foreclose and seize any machinery, property or deposits of ChipMOS Taiwan and to waive any penalties that might otherwise have to be imposed on the Company in case of breach under the existing loan agreements.