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December 15, 2010, 11:18 AM EST
By Ian King
(Corrects amount of interest payments in fifth paragraph.)
Dec. 15 (Bloomberg) -- Freescale Semiconductor Inc., taken private in a $17.6 billion buyout in 2006, may be ready for an initial public offering in the coming year, Chief Executive Officer Rich Beyer said.
The Austin, Texas-based chipmaker has reorganized its debts and improved its performance, building “credibility in the marketplace,” Beyer said. If the economy continues to recover and the semiconductor industry grows next year, the company will be in a position to sell shares, he said.
“We believe that we will be in a position to do an IPO,” he said yesterday in an interview in San Francisco. “We have a capital structure that works.”
Freescale, the largest supplier of chips to U.S. automakers, will aim to raise more than $1 billion to pay down $1.2 billion of debt coming due in 2014, Beyer said. The company piled on debt when it was taken private by Blackstone Group LP, Carlyle Group, Permira Advisers LLP and TPG Capital. Those investors won’t sell their own shares yet and will allow the company to raise cash with new equity in the IPO, Beyer said.
The company’s net loss narrowed to $156 million last quarter, while sales jumped 29 percent to $1.15 billion. Freescale ended the quarter with $1.07 billion of cash and paid out $144 million in interest.
The company has a loan of about $600 million coming due next year, then $1.2 billion more in 2014. In 2016, Freescale must repay $3 billion.
Before 2016, “there will be many opportunities to pay it down, to do converts that eliminate some of it,” Beyer said. “I believe the capital structure is not scary to the financial community.”
--Editors: Tom Giles, Nick Turner
To contact the reporters on this story: Ian King in San Francisco at ianking@bloomberg.net
To contact the editor responsible for this story: Tom Giles at tgiles5@bloomberg.net
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(Corrects amount of interest payments in fifth paragraph.)
Dec. 15 (Bloomberg) -- Freescale Semiconductor Inc., taken private in a $17.6 billion buyout in 2006, may be ready for an initial public offering in the coming year, Chief Executive Officer Rich Beyer said.
The Austin, Texas-based chipmaker has reorganized its debts and improved its performance, building “credibility in the marketplace,” Beyer said. If the economy continues to recover and the semiconductor industry grows next year, the company will be in a position to sell shares, he said.
“We believe that we will be in a position to do an IPO,” he said yesterday in an interview in San Francisco. “We have a capital structure that works.”
Freescale, the largest supplier of chips to U.S. automakers, will aim to raise more than $1 billion to pay down $1.2 billion of debt coming due in 2014, Beyer said. The company piled on debt when it was taken private by Blackstone Group LP, Carlyle Group, Permira Advisers LLP and TPG Capital. Those investors won’t sell their own shares yet and will allow the company to raise cash with new equity in the IPO, Beyer said.
The company’s net loss narrowed to $156 million last quarter, while sales jumped 29 percent to $1.15 billion. Freescale ended the quarter with $1.07 billion of cash and paid out $144 million in interest.
The company has a loan of about $600 million coming due next year, then $1.2 billion more in 2014. In 2016, Freescale must repay $3 billion.
Before 2016, “there will be many opportunities to pay it down, to do converts that eliminate some of it,” Beyer said. “I believe the capital structure is not scary to the financial community.”
--Editors: Tom Giles, Nick Turner
To contact the reporters on this story: Ian King in San Francisco at ianking@bloomberg.net
To contact the editor responsible for this story: Tom Giles at tgiles5@bloomberg.net
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