This is a first as far as I can recall in the SCE sector.....
Teradyne to Raise Up to $200 Million From Mortgages
By Tim McLaughlin
BOSTON (Reuters) - Teradyne Inc. (NYSE:TER - news), the world's top maker of semiconductor test equipment, on Monday said it could raise up to $200 million in real estate financing by year-end in order to help it weather a severe industry downturn.
Boston-based Teradyne is working to raise $50 million to $200 million by securing mortgages on some of its real estate holdings, Teradyne spokesman Tom Newman said.
Teradyne, which last month raised $400 million in a convertible bond offering. would use money raised from real estate financing for operating purposes in case the industry downturn lasts as long as two years, Newman said.
``We'll definitely do something there,'' Newman told Reuters. ''We'll probably decide no later than the first quarter, but it's likely it will happen this year. We're talking to a bunch of people, but we haven't decided how much we want to get out of that.''
Teradyne has been waylaid by a steep downturn in the semiconductor industry that could last several more quarters. The company expects fourth-quarter revenue between $200 million and $250 million, compared with $789.2 million in the year-ago period.
``When you're facing a disastrous environment...you want to have alternatives that you can control,'' Newman said.
Teradyne's real estate holdings, land and property, total about $350 million, Newman said.
Teradyne, which historically has kept debt off its balance sheet, last month completed a private placement of $400 million of 3.75 percent convertible senior notes due 2006 to bolster working capital. Before the offering, Teradyne held cash and marketable securities worth about $320 million at the end of the third quarter.
The convertible offering raised more than Teradyne had planned and it helps give the company enough of a cushion to ride out a prolonged industry downturn, Newman said. The one other convertible debt offering in Teradyne's history came in the 1980s, he added.
Separately, Teradyne has received multiple bids for the Diagnostic Solutions business owned by GenRad Inc., which Teradyne recently acquired.
``All offering prices we think are in the right ballpark,'' Newman said. ``We're fairly comfortable (a sale) will conclude by the end of the year. People seem to have a similar valuation of the business as we do.''
Teradyne shares moved up $1.09, or 4.22 percent, to $26.95 in afternoon trade on the New York Stock Exchange (news - web sites). The stock is off about 28 percent this year, underperforming the 10 percent decline on the Philadelphia Semiconductor Index (^SOXX - news). |
