PSIT Psi Tech Hldgs (MM)

PSi Technologies Issues a US$7.0 Million 4-Year Exchangeable Senior Subordinated Note to an Affiliate of Merrill Lynch Global Emerging Markets Partners, L.P. SOUTH SAN FRANCISCO, Calif. and MANILA, Philippines, June 2 /PRNewswire-FirstCall/ -- PSi Technologies Holdings, Inc., (NASDAQ:PSIT), a leading independent provider of assembly and test services for the power semiconductor market, announced that its Board of Directors approved today the issuance of a US$7.0 million 4-year Exchangeable Senior Subordinated Note to an affiliate of Merrill Lynch Global Emerging Markets Partners, L.P., the Company's majority shareholder. "The issuance of the Note is a key initiative to strengthen the Company's balance sheet and to support the development and installation of sufficient capacities to meet projected demands for the Company's Power QFN package," said Arthur J. Young, Jr., Chairman and CEO. The Note is issued by the Company's principal operating subsidiary and matures in 2009. It accrues interest at 10 percent annually, net of Philippine withholding tax, and will be exchangeable into the Company's common stock at a price of $1.00 per share. The exchange price is subject to reduction in the event the Company does not meet certain performance targets for the fourth quarter of 2005 and first quarter of 2006. The proceeds of the Note will be used to partially finance capital expenditures related to the introduction of the Company's Power QFN (Quad Flat No-Lead) Package and for the repayment of due and outstanding suppliers' credits and capital expenditures payables. About PSi Technologies Holdings, Inc. PSi Technologies is an independent semiconductor assembly and test service provider focused on the power semiconductor market. The Company provides comprehensive package design, assembly and test services for power semiconductors used in telecommunications and networking systems, computers and computer peripherals, consumer electronics, electronic office equipment, automotive systems and industrial products. PSi's customers include most of the major power semiconductor manufacturers in the world such as Infineon Technologies, ON Semiconductor, Philips Semiconductor, and ST Microelectronics. For more information, visit the Company's web site at http://www.psitechnologies.com/ or call: Edison G. Yap, CFA PSi Technologies Holdings, Inc. (63-2) 837-7702; or (63-917) 894-1335 Amy Cozamanis (General Information) Financial Relations Board (310) 854 8314 Safe Harbor Statement This press release contains forward-looking statements that involve risks and uncertainties. Actual outcomes may differ materially. Factors that might cause a difference include, but are not limited to, those relating to the pace of development and market acceptance of PSi's products and the power semiconductor market generally, commercialization and technological delays or difficulties, the impact of competitive products and technologies, competitive pricing pressures, manufacturing risks, the possibility of our products infringing patents and other intellectual property of third parties, product defects, costs of product development, manufacturing and government regulation, risks inherent in emerging markets, including but not limited to, currency volatility and depreciation, restricted access to financing, and political and social unrest. PSi undertakes no responsibility to update these forward-looking statements to reflect events or circumstances after the date hereof. More detailed information about potential factors that could affect PSi's financial results is included in the documents PSi files from time to time with the Securities and Exchange Commission. DATASOURCE: PSi Technologies Holdings, Inc. CONTACT: Edison G. Yap, CFA of PSi Technologies Holdings, Inc., (63-2) 837-7702, or (63-917) 894-1335, ; or General Information, Amy Cozamanis of Financial Relations Board, +1-310-854 8314, , for PSi Technologies Holdings, Inc. Web site: http://www.psitechnologies.com/

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