PE-owned Global A&T Electronics files for bankruptcy

Creditors have already endorsed a restructuring plan that will see Global A&T’s debt burden reduced from approximately $1.12 billion to $665 million and Affinity and TPG give up a 31% equity interest in the business. Annual debt servicing costs will also fall by nearly half to around $56.5 million, according to a statement.

The two private equity firms used Global A&T as a vehicle to acquire UTAC in 2007. They are said to have paid $1.25 billion, including around $725 million in debt in what was one of the first covenant-lite deals seen in Asia. Attempts were made to list the business in Singapore in 2010 and 2011, and then in the US in 2015. The offerings were pulled due to adverse market conditions.

In 2013, Global A&T refinanced its debt, issuing $625 million in senior secured notes followed by a further $502.3 million in additional notes. The debt, which carries an annual interest rate of 10%, is due to mature in 2019.

The restructuring will see holders of the initial batch of notes receive $540 million in new notes issued by the company plus some cash compensation. Holders of the additional notes will get $105 million in new secured notes as well as the equity interest in Global A&T. The new notes have a five-year tenor and an 8.5% coupon. Affinity and TPG will retain 69% of the equity.

Global A&T’s services are used for a broad range of semiconductor chips with end uses such as smart phones, Bluetooth and WiFi, consumer and computing devices, and automotive, industrial and medical applications. Its customers are primarily fabless companies, device manufacturers, and wafer foundries. The company has manufacturing facilities in Singapore, Thailand, Taiwan, and China.

Sales came to $688.7 million in 2016, up from $679.1 million the previous year. The company’s net loss widened to $141.5 million from $117.5 million over the same period. Interest payments on the senior secured notes reached $115 million in 2015 and $114 million in 2016.

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• Topics
• Southeast Asia
• Technology
• Restructuring
• Financing
• Singapore
• manufacturing
• Affinity Equity Partners
• TPG Capital