Asat sets ADS price range of $11 to $14 for Nasdaq IPO

Asat aims to capitalize on a booming semiconductor market to list 20 million American depositary shares on Nasdaq.

Asat, the world's third-biggest independent semiconductor packaging and testing company, hopes to raise up to $280 million in its initial offering of 20 million American depositary shares (ADS) on Nasdaq, according to lead-manager Salomon Smith Barney.

The company aims to sell each ADS for between $11 and $14. Each ADS will represent five underlying Asat shares. An additional 3 million ADS are being set aside for an overallotment option. If the ADS are sold at the top end of the range and the overallotment option is exercised, the company could raise as much as $364 million. It plans to use about half the money to pay back debt, the underwriters say. It will use the rest to expand its facilities.

Asat kicked off its roadshow in its home base of Hong Kong yesterday. It will move to Singapore, the US and Europe in the coming weeks. It expects to price the ADS on 10 July. The offering is being managed by Salomon Smith Barney, Donaldson Lufkin & Jenrette and Chase H&Q.

"The offer has got off to a flying start," says a banker at Salomon Smith Barney. "A lot of people are looking at the telecommunications, media and technology sector, but they are looking at the quality companies and at companies with an earnings history."

Asat had revenue of $312 million in the year ended 30 April, up from $220 million the year before. It posted a profit in 1999 of $26 million. The company is benefiting from a boom in the global semiconductor market, which is expected to grow 31% to $190 billion in 2000, according to the US-based Semiconductor Industry Association. Demand for dynamic random access memory (DRAM) chips is rising as increased internet use boosts demand for personal computers.

Asat, which is 50% owned by Hong Kong-listed QPL International Holdings, provides packaging, assembly and testing services to semiconductor manufacturers. The company takes chips from wafer fabrication factories, cuts them into individual chips, encapsulates them in plastic and provides a medium through which the signals from the chips can be passed through to the printed circuit board.

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