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ProMOS Announces Proposed Convertible Bond Tender Offer
ProMOS announces today that it intends to commence a tender offer (the ¡§Tender Offer¡¨) for its US$350mm Zero Coupon Convertible Bonds issuance due 2012 (the ¡§Convertible Bonds¡¨).

Funding for this Tender Offer will be provided by a new NTD 3bn Syndicated Loan facility arranged by Bank of Taiwan (NTD 2.9bn after the related arrangement fee and expenses) with commitment letter dated February 17, 2009 (the ¡§Facility¡¨). This Facility is, as yet, subject to finalization by each of the participating banks and represents the entire and only source of funding for this tender offer.

A draw down condition of this Facility requires achieving a very high minimum acceptance level for the Tender Offer. This Facility is secured against our assets with a book value approximately NTD 15bn. This Facility can only be used for repurchase of the Convertible Bonds and the final drawdown amount will be limited to the actual consideration payable for settlement of the Tender Offer. For the avoidance of doubt, any undrawn portion will be cancelled by the syndicate lenders.

The Convertible Bonds are listed on the Singapore Exchange Securities Trading Limited and currently, there is US$ 335.615mm in principal amount of Convertible Bonds outstanding. As of 2 February 2009, redemption requests pursuant to the terms and conditions of the Convertible Bonds have been received from the holders of approximately US$ 326.916mm in principal amount of Convertible Bonds.

It is our intention to utilize the full amount of the Facility and buyback all of the outstanding Convertible Bonds.

We expect to commence the Tender Offer and provide full details on proposed pricing and terms within the next few days, subject to discussions with the dealer manager, Citigroup Global Markets Inc. (¡§Citi¡¨), market conditions and the finalization of our financing arrangements.

If bondholders have any questions on the details of expected Tender Offer, please contact the representative of Citi listed below.


Due largely to adverse macroeconomic factors and highly challenging conditions in the global DRAM industry, we have experienced declining revenues and cash flow in recent periods.

The deteriorating conditions have adversely affected our financial position:

• a decline of approximately 36% in sales volume for the twelve months ended December 31, 2008 as compared to the same period in 2007

• an operating loss of NTD 24.5bn for the twelve months ended December 31, 2008 as compared to NTD 6.2bn in the same period in 2007

• a decrease in our cash balance from NTD 2.6bn as of 30 June 2008, to NTD 0.2bn as of 31 December 2008 and NTD 0.2bn as of 31 January 2009. The cash balance as of 31 December 2008 and 31 January 2009 excludes cash secured against other loan facilities and unavailable for usage in our operations or this Tender Offer, which amounts to NTD 1.5bn and NTD 1.7bn respectively. Other than negative cash flow from operations, this balance has been impacted in recent months by certain repayments required on overdue payables to keep our operations running

• an inability to meet scheduled debt principal repayments in December 2008 on our term loan dated October 17, 2005. We have applied to the Taiwan government for exemption from the repayment requirements under our term loans for a period of 12 months and this application is still pending

The company has exhausted all possible options to secure the required funding to meet the redemption obligation on our Convertible Bonds. The options investigated have included sale of certain manufacturing equipment, additional secured loans and additional public or private market issuance of debt, convertible or equity securities. However due to the challenging market factors described above and ongoing operational cashflow losses, we were unable to secure the funding to meet the redemption requirements in full. We believe the Syndicated Loan we have secured is the best available option to us in the current market.

Current Financial Position

As per our management accounts as of 31 Dec 2008, we had NTD 130bn of total assets including NTD 108bn of Plant Property Equipment. Of our total assets of NTD 130bn, NTD 72.7bn is secured by our senior lenders (not including the NTD 15bn additional secured as part of the new Facility). The major components of the remaining unencumbered assets are property, plant and manufacturing equipment. In our experience, the current market for sale of second-hand manufacturing equipment is difficult given the overall semiconductor industry conditions.

Our total debt outstanding is NTD 85.9bn which includes NTD 58.9bn of senior secured debt, NTD 27.0bn of unsecured debt (including the Convertible Bond) and in addition we have NTD 14.9bn of account and machinery payables.

Our latest cash balance in management accounts, as disclosed in our TSE filing was NTD 0.2bn, which excludes NTD 1.7bn of cash used as security against our secured loan facilities and unavailable for use as part of this tender offer or in regular operations unless certain conditions are satisfied.

As well as an inability to meet scheduled debt principal repayments on December 26, 2008 of NTD 0.83bn and our obligations under the convertible bonds, we have additional principal payments on our debts becoming due in 2009 of NTD 19.2bn. As described above we have applied to the Taiwan government for exemption from the repayment requirements under our term loans for a period of 12 months and this application is still pending.

Implications and Ongoing Strategy

If the Tender Offer is successful, we may undergo an extensive restructuring and consolidation plan in consultation with various industry players and the Taiwan government. No details have yet been finalized and we can give no assurance on the level of value to be attributed to senior debt holders, unsecured debt holders or equity holders as part of this process.

If the Tender Offer is not successful and we are unable to secure any additional funds on a timely basis, we will continue to investigate alternatives and may consider taking any legal mean available to us under applicable laws to pursue the best interest of all constituencies of Promos in response to any legal action initiated by creditor(s).

Promos would like to take this opportunity to thank its partners, suppliers and employees for their loyalty and support during this difficult period. Should this tender offer be successfully completed, we intend to rapidly further our ongoing strategic discussions and make further announcements defining our future structure and positioning.

Dr. Ben Tseng
Tel: +886-3-579-8308
Email: promosmedia@promos.com.tw

Citi Contact:
Pamela Yeung / Timothy Wee
Tel: +852-2501-2695 / +852 2501 2134
Email: Promos.Tender.Offer@citi.com

About ProMOS

ProMOS Technologies, headquarters in Hsin-chu, Taiwan, is a comprehensive memory solution provider and renowned in the global DRAM industry for its extensive experiences in 300mm fabs . The company manufactures high-performance and high-density commodity DRAM , SDRAM, Mobile RAM as well as LCD Driver IC products. ProMOS is listed on Taiwan GreTai Securities Market. For more information, please visit www.promos.com.tw.

  Media Contact: Sophia Wong, Public Relations Department
  eMail: sophia_wong@promos.com.tw
  Tel: (03) 579-8308