PMC-Sierra Announces Proposed Offering of Senior Convertible Notes
October 20 2005 - 4:00AM
Business Wire
PMC-Sierra, Inc. (Nasdaq:PMCS) today announced that it intends to
offer, subject to market conditions and other factors, $215 million
aggregate principal amount of senior convertible notes due 2025.
This offering will be made through a private placement to qualified
institutional buyers pursuant to Rule 144A under the Securities Act
of 1933. The notes are expected to provide for a net share
settlement and, under certain circumstances, may be convertible
into cash (up to the principal amount of the notes) and, with
respect to any excess conversion value, into cash, shares of common
stock of PMC-Sierra or a combination of cash and shares of common
stock at the company's option. The interest, conversion rate,
offering price and other terms of the notes will be determined by
negotiations between PMC-Sierra and the initial purchasers of the
notes. PMC-Sierra expects to grant the initial purchasers of the
notes a 30-day overallotment option to purchase up to an additional
$35 million aggregate principal amount of the notes. PMC-Sierra
intends to use the net proceeds from this proposed offering for
general corporate purposes, including capital expenditures,
research and development and potential investments in and
acquisitions of complementary businesses, partnerships, minority
investments, products or technologies, to fund further enhancements
of PMC-Sierra's operating infrastructure and for working capital.
If PMC-Sierra reaches an agreement to purchase a semiconductor
business that it has identified and that is consistent with its
business strategy, PMC-Sierra expects the proceeds from this
proposed offering will be used to fund a portion of the purchase
price. The notes and common stock issuable upon conversion of the
notes have not been registered under the Securities Act of 1933 or
applicable state securities laws and, unless so registered, may not
be offered or sold in the United States or to U.S. persons except
pursuant to an applicable exemption from, or in a transaction not
subject to, the registration requirements of the Securities Act of
1933 and applicable state securities laws. This press release is
neither an offer to sell nor a solicitation of an offer to buy any
securities and shall not constitute an offer, solicitation or sale
in any jurisdiction in which such offer, solicitation or sale is
unlawful.
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