DRAM maker ProMOS Technologies has received approval at a special shareholders meeting for plans to reduce its current capital, and then raise additional funds through private placement. During the meeting, ProMOS chairman ML Chen noted that the company is seeking to bring in new investors, and will improve its financial situation under the new capital structure.

ProMOS is not following in Qimonda's footsteps, Chen claimed.

ProMOS will scale down its paid-in capital by 85%, or about NT$21.62 billion (US$750 million), to NT$3.815 billion. After the downsizing, the company will move to raise new capital through private placement to improve operational cash flow and strengthen its financial structure, and also bring in new strategic partners. Both resolutions received the nod from the company's shareholders.

The planned fundraisers include the issuance of up to 1.5 billion new shares for its creditors to convert the debts that ProMOS owes into equity, and the sale of up to two billion new shares via private placement.

ProMOS expects to carry out its planned capital downsizing in the fourth quarter, followed by the fundraising.

Mosel Vitelic and United Microelectronics Corporation (UMC) are still the largest shareholders at ProMOS, but will see their stakes in the DRAM maker diluted after new investors come on board.

Following the financial restructuring, ProMOS will dedicate its efforts to diversifying products, Chen pointed out. The company is looking to transform itself into a niche memory chipmaker that specializes in specialty DRAM and mobile RAM, and also provide foundry services for products such as LCD driver ICs, according to Chen.

Source:digitimes