+44 (0)24 7671 8970
More publications     •     Advertise with us     •     Contact us
 
News Article

TRW Inc. In Three Deals To Monetize Part of Stake In RFMD Inc.

Cash generated from the deals will be used to pay down TRW short-term debt arising from LucasVarity acquisition

20 February, 2000

TRW Inc., equipment maker for the automotive and aerospace industries, said last Wednesday it is in three deals to monetize part of its stake in wireless communications equipment maker RF Micro Devices Inc. (RFMD).

TRW said cash generated from the deals will be used to pay down its short-term debt. The three so-called forward sale agreements will allow TRW to realize cash equivalent to the current value of gross proceeds that would be derived from the sale of 2 million shares of RFMD stock at current market prices.

Shares of RFMD were up 1 trading at 98-3/16 in early afternoon trade on the Nasdaq stock market, while shares of TRW were up 5/8 trading at 43-3/16 on the New York Stock Exchange.

The three deals, which are about equal in value, have terms of 36, 42, and 48 months, respectively, the company said. The forward sales are designed to eliminate TRW s exposure to any decline in RFMD s share price, while preserving a substantial portion of any further share price appreciation during the terms of the deals, the company said.

Excluding the 2 million shares, TRW has sold about 2.2 million shares of RFMD stock since Jan. 1 at an average price of $81.40 per share. TRW, which acquired its stake in RFMD in 1996, now owns about 11.9 million shares, about a 14.9% stake, in RFMD.

TRW attained its stake in exchange for giving RF Micro an exclusive, open-ended technology license for wireless application components of less than 10 GHz using TRW s GaAs HBT technology. During the past year, TRW said it has reduced its ownership in RFMD in order to raise proceeds to pay off debt incurred during its 1999 acquisition of heavy-braking firm LucasVarity.In November 1999, TRW extended RFMD s existing license to produce GaAs transistors to include its use in commercial coaxial and other non-fibre applications. At that time, TRW said it was committed to maintaining at least a 10% stake until at least May 1, 2001.

In exchange for the expanded license, RF Micro granted TRW warrants to buy 750,000 shares of its common shares, which become exercisable in 2001.

Contact:
Jerry D. Neal RFMD Inc.
Tel: +1 910 664 1233
Email: jneal@rfmd.com
Or
Dan McClain TRW Inc.
Tel: +1 310 812 4702
Email: dan.mcclain@trw.com Jerry D. Neal RFMD Inc.
Tel: +1 910 664 1233
Email: jneal@rfmd.com
Or
Dan McClain TRW Inc.
Tel: +1 310 812 4702
Email: dan.mcclain@trw.com
E-mail: dan.mcclain@trw.com

×
Search the news archive

To close this popup you can press escape or click the close icon.
×
Logo
×
Register - Step 1

You may choose to subscribe to the Compound Semiconductor Magazine, the Compound Semiconductor Newsletter, or both. You may also request additional information if required, before submitting your application.


Please subscribe me to:

 

You chose the industry type of "Other"

Please enter the industry that you work in:
Please enter the industry that you work in: