To: Andrew Vance who wrote (23906 ) 8/14/2001 8:27:21 AM From: Zeev Hed Read Replies (2) | Respond to Andrew, WFR is already a "foreign" owned company, thus the government will have little excuse to intervene if it becomes Japanese owned rather than German owned. The way I see it, if SEH or Wacker (or possibly Sumitomo or Toshiba which also have large wafer's operations) do not step to the plate and buy from VEBA (and the public) the company before it goes under CH 11 protection, they will do it after WFR goes into CH 11. At the current burn rate, WFR has barely one quarter of cash left, not counting Capex commitments they might have. I don't think that WFR in the last two years had the money to set up a major 300 mm facility, and thus the hope that premiums paid on 300 mm wafers would save them might be premature. In the last bounce in wafer demand, the price of wafers never rebounded enough to provide appropriate margins to invest in capacity (300 mm). Before the "additional charge" of $250 MM or so, the value of WFR was about $2.5/share. If a foreign entity acquires WFR completely, they may not be able to fully use the $250 MM in "tax benefits assets", and that might have been the reason for additional charges, to prepare the ground for a foreign entity to take over completely. What is important to remember is that in order to be profitable, WFR must operate at a rate of at least $250 MM shipments quarterly (or close to that), that will be a 40% increase relative to their current shipment rate, not something likely in a quarter or two, the time left to burn the cash on hand. I think that it is more likely that the vultures will wait until CH 11 is filed, and then pick up the pieces on the cheap and leave the stock holders with very little if anything. If the $250 MM just taken off is no longer a "real asset", the book value of WFR is already negative, and it is quite possible that even the debt holders (VEBA) will have to take a beating. Frankly, playing with WFR here remains very dangerous, I would rather play the EXDS "CH 11 watch" and hope for revival than the WFR story.
