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Semiconductor Business IPO Conference
September 09, 2013 8:00 am ET
Chris Chaney - Director of Investor Relations
Ahmad R. Chatila - Chief Executive Officer, President and Director
Brian Wuebbels - Chief Financial Officer and Executive Vice President
Sanjay Shrestha - Lazard Capital Markets LLC, Research Division
Shahriar Pourreza - Citigroup Inc, Research Division
Jagadish K. Iyer - Piper Jaffray Companies, Research Division
Jeffrey D. Osborne - Stifel, Nicolaus & Co., Inc., Research Division
Ana Goshko - BofA Merrill Lynch, Research Division
Krish Sankar - BofA Merrill Lynch, Research Division
Brian K. Lee - Goldman Sachs Group Inc., Research Division
Brandon Heiken - Crédit Suisse AG, Research Division
Mahesh Sanganeria - RBC Capital Markets, LLC, Research Division
David Epstein - CRT Capital Group LLC, Research Division
Previous Statements by SUNE
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I would now like to turn the conference over to our host, Director of Investor Relations, Mr. Chris Chaney. Please go ahead.
Good morning, and welcome to our conference call today to discuss the initial public offering of our Semiconductor business. Joining me on the call today are Ahmad Chatila, our CEO of SunEdison; and Brian Wuebbels, the CFO of SunEdison. We will be displaying slides today through the webcast viewer, which can be accessed in the Investor Relations section of our website at www.sunedison.com. These presentation slides will be available only for the duration of this call.
Before we get started today, I'd like to remind everyone that our comments during the conference call may contain forward-looking statements, and information concerning factors that could cause actual results to differ can be found in SunEdison's filings with the U.S. Securities and Exchange Commission. In addition, I'd like to point out that our comments today about the proposed offering should not be construed as an offer to sell or a solicitation of offers to buy any securities.
With that, I'd like to turn the call over to Ahmad.
Ahmad R. Chatila
Thanks, Chris. Good morning, everyone, and thank you for joining us. As you are aware, we issued a press release on August 22 in the planned IPO of our Semiconductor business. Today, we'll be discussing details of the IPO, transaction rationale and what it means to SunEdison, and we will give an update on our business outlook.
SunEdison plans to separate its Semiconductor business from its solar business through an IPO, which will enable both companies to pursue a more focused growth strategy. The new SunEdison Semiconductor, Inc. or SSI will continue to be a market leader in the advanced wafering technologies. SSI has improved its market share significantly over the past 4 years under the leadership of Shaker Sadasivam, driven by an innovative and broad product portfolio, as well as a clear focus on customer service.
Our Semiconductor business has a long history of product innovation and process technology expertise from pioneering early wafer technologies to being a leader in the advanced technologies today, including FP and SOI. This subsidiary IPO will create a new structure that will allow each independent company to pursue its shareholder value-generating strategies, focus on key markets and customers to optimize capital structures and enhance access to growth capital for each company in the years ahead.
SSI will be a separate publicly traded company with an independent capital structure, a separate Board of Directors and management and will be traded under the ticker WFR. SunEdison will initially hold a controlling stake in the new company post IPO. Our management and Board of Directors evaluated a number of different options for the Semiconductor business, including spinoff, split off and sale of the business, and we determined that subsidiary IPO was the best way to maximize value for shareholders. We will continue to evaluate all options as the transaction progresses. We plan to have for SSI committed revolving credit facility and a new senior unsecured term loan at the time of the IPO, which will take place in early 2014 subject to regulatory review, market conditions and other considerations.
It is contemplated that we will recapitalize our SunEdison debt, including our senior unsecured bonds and second-lien term facility, which mature in 2019 and 2017, respectively, upon consummation of the SunEdison Semiconductor IPO. We believe this recapitalization will allow us to optimize the capital structure and fund growth going forward of both businesses. Moreover, SunEdison will support SSI with poly supply and other transition agreements, as well as licensing of IP, which agreements are expected to be in place at the time of the IPO.
SSI financials will be consolidated in SunEdison results, and minority interest will be reflected on the consolidated financial statements. Shaker Sadasivam, a 25-year veteran of the Semiconductor industry, will be SSI's CEO. Key facilities will be allocated between the businesses, with sites such as Kuching, Portland and our polysilicon facilities in Texas and South Korea remaining with SunEdison and the semiconductor factories and our shuttered polysilicon facility in Merano, Italy allocated to SSI. SunEdison will retain FBR and solar wafering technologies and will license CCZ and diamond wire to SSI for semiconductor use. SSI will continue to have tremendous semiconductor IP in crystalline wafering and materials, including FP and SOI.
We arrived at this idea of subsidiary IPO because we believe each business is now positioned to stand and thrive on their own as separate companies, which wasn't the case before. This transaction maximizes value for SunEdison shareholders by allowing each company to focus on its core competencies and optimize its capital structure. Moreover, it will enhance access to capital for each company. SunEdison will have potential to monetize its remaining ownership in SSI and use the capital to fund solar growth. This plan will be good for our shareholders, provide better transparency into both businesses and create the opportunity for investors to invest in a single industry.