Published March 13, 2009

SIAS: Rights issue is Chartered's best option

By JOYCE HOOI

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CHARTERED Semiconductor Manufacturing has moved to assure the Securities Investors Association of Singapore (SIAS) that its US$300 million rights issue is a sound move.

At Chartered's request, Chartered chief executive Chia Song Hwee met SIAS president David Gerald yesterday.

'SIAS discussed with Mr Chia the availability of other options, and after hearing the management, SIAS is satisfied that the rights issue was the best option for the company,' said Mr Gerald.

'SIAS also understands that Chartered fully considered the impact on its shareholders in the current economic environment, and that the rights issue was only decided on after exhausting all other options.'

At yesterday's meeting, Chartered explained the need to strengthen its balance sheet, increase financial flexibility and preserve customer confidence, said Mr Gerald.

'SIAS is pleased to note Mr Chia's assurance that there will not be another rights issue in the near future.'

The meeting took place after the beating Chartered's shares took on Monday's news of the rights issue, in which it proposes to issue 27-for-10 shares at seven cents apiece.

The share price closed one cent lower yesterday, at 10.5 cents. Since the start of the week, the stock has lost 58.8 per cent of its value from its opening price of 25.5 cents on Monday. The most dramatic fall was on the day after the rights offer was announced - the shares plunged 39 per cent to close at 12.5 cents.

Despite the fears of a jittery market, SIAS is satisfied with the outcome of its meeting with Chartered. 'SIAS applauds Chartered's proactive steps in reaching out to its investors and seeking to address their concerns,' Mr Gerald said. SIAS and Chartered plan to jointly hold a forum to address investors' concerns in the coming weeks.