Reducing Net Debt Through June 2015 by Approximately $55 Million
While Extending June 2015 Maturities to December 2018
NEWPORT BEACH, Calif. & MIGDAL HAEMEK, Israel--(BUSINESS WIRE)--Mar. 20, 2014--
TowerJazz, the global specialty foundry leader, today announced that it
has signed definitive agreements with certain existing US and offshore
institutional holders, pursuant to which Jazz Technologies, Inc. will
issue new un-secured bonds due December 2018 (the “new bonds”) in
exchange for approximately $45 million in aggregate principal amount of
the approximately $94 million aggregate principal amount of 8% senior
bonds due June 2015. The new bonds will be unsecured and are therefore
structurally subordinated to the Wells Fargo credit line of up to $70
million due 2018, as are the currently outstanding bonds due June 2015.
In addition, certain of the participating bondholders have agreed to
purchase approximately $10 million principal amount of the new bonds
maturing 2018. These transactions will strengthen TowerJazz’s balance
sheet by reducing net debt due through June 2015 by approximately $55
million, comprised of an increase of approximately $10 million in its
cash balance and a reduction of the bonds due June 2015 from
approximately $94 million to approximately $49 million.
The new bonds, which will mature December 31, 2018, carry an 8% coupon
payable in cash in two semi-annual installments through maturity and may
be converted into ordinary shares of Tower at $10.07 per share,
reflecting a 20 percent premium over the average closing price for the
Company’s ordinary shares for the five trading days ended one day prior
to signing date of these agreements. The new Jazz bonds will not be
guaranteed by Tower Semiconductor Ltd.
Oren Shirazi, TowerJazz chief financial officer,
said: "This exchange and new note purchase with certain of our US and
offshore existing bondholders is another vote of confidence from the
investment community for our company and our long-term strategy. The $70
million Wells Fargo credit line extension we signed a few months ago,
together with this transaction, are instrumental in enabling TowerJazz
to execute on its strategic growth plan and further improve our
balance sheet and financial position."
Russell Ellwanger, chief executive officer, summarized: "This bonds
restructuring, together with the recently announced India cabinet
decision on the 300mm fab establishment, the pending Panasonic joint
venture which is expected to close within a few weeks, and our
previously announced Q4 2013 year-over-year 25% organic growth,
demonstrates a company actively making progress on its core business,
creative M&A/Joint Venture, financials and balance sheet. The end result
is a stronger company serving a continually growing customer base
producing model shareholder value."
The consummation of the transaction contemplated by the exchange and
note purchase agreements is subject to certain routine regulatory
consents and satisfaction of customary closing conditions. The new bonds
will be issued at the closing of the exchange transaction, which is
expected to occur by the end of this month.
The exchange and note purchase transactions have not been registered and
will not be registered under the Securities Act of 1933, as amended, and
the securities offered in the exchange may not be offered or sold in the
United States absent registration or an applicable exemption from
registration. These transactions are being entered into with the
participating bondholders in reliance upon applicable exemptions from
the registration requirements of the Securities Act of 1933, as amended.
This press release is not an offer to exchange or a solicitation of an
offer to exchange any securities.
About TowerJazz
Tower Semiconductor Ltd. (NASDAQ: TSEM, TASE: TSEM), its fully owned
U.S. subsidiary Jazz Semiconductor Ltd., and its fully owned Japanese
subsidiary TowerJazz Japan, Ltd., operate collectively under the brand
name TowerJazz, the global specialty foundry leader. TowerJazz
manufactures integrated circuits, offering a broad range of customizable
process technologies including: SiGe, BiCMOS, Mixed-Signal/CMOS, RFCMOS,
CMOS Image Sensor, Power Management (BCD), and MEMS capabilities.
TowerJazz also offers clients a world-class design enablement platform,
providing a quick and accurate design cycle. In addition, TowerJazz
provides (TOPS) Technology Optimization Process Services to IDMs and
fabless companies that need to expand capacity. TowerJazz offers
multi-fab sourcing with two manufacturing facilities located in Israel,
one in the United States and one in Japan. Additional information is
available at www.towerjazz.com.
Safe Harbor Regarding Forward-Looking Statements
This press release includes forward-looking statements, which are
subject to risks and uncertainties. Actual results may vary from those
projected or implied by such forward-looking statements. A complete
discussion of risks and uncertainties that may affect the accuracy of
forward-looking statements included in this press release or which may
otherwise affect TowerJazz’s business is included under the heading
"Risk Factors" in Tower’s most recent filings on Forms 20-F, F-3 and
6-K, as were filed with the Securities and Exchange Commission (the
“SEC”) and the Israel Securities Authority and Jazz’s most recent
filings on Forms 10-K and 10-Q, as were filed with the SEC,
respectively. Tower and Jazz do not intend to update, and expressly
disclaim any obligation to update, the information contained in this
release.
Source: TowerJazz
TowerJazz Investor Relations
Noit Levi, +972 4 604 7066
Noit.levi@towerjazz.com
or
GK
Investor Relations
Kenny Green, 646-201-9246
towerjazz@gkir.com