Tech Trader Daily - Barron's Online, 9 Mar 2009, Eric Savitz
Chartered Semiconductor (CHRT) shares are being shredded today on news that the Singapore-based contract chip manufacturer plans to raise $300 million via a highly dilutive rights offering.
Chartered will offer a 27-for-10 rights offering, with the rights priced at 45 cents per American Depositary Share, each of which represents 10 ordinary shares. That is a 71% discount to Friday’s closing price. The company’s largest investor, Singapore Technologies Semiconductor, which is a unit of Temasek Holdings, has promised to purchase its 59.4% share of the offering, and to act as a standby purchaser for up to 90% of the offering. The company also said that subsequent to completion of the offering, it will do a 1-for-10 reverse split, in part to address the danger of the ADS price falling below $1 for an extended period.
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