Vishay Agrees to Sale of Zero-Coupon Convertible Subordinated Notes

May 30, 2001 by Jeff Shepard

Vishay Intertechnology (Malvern, PA) reports that it has agreed to the private sale of a series of zero-coupon convertible subordinated notes, due 2021, known as LYONs. The company anticipates gross proceeds of approximately $303.2 million, and intends to use those proceeds for general corporate purposes, including the retirement of existing debt. The initial purchaser of the LYONs will also have a 30-day option to purchase additional LYONs to cover over-allotments, which, if exercised, would give Vishay up to approximately $50.2 million in additional gross proceeds.

The LYONs will be convertible into approximately 11.3 million shares of Vishay common stock, assuming the over-allotment option is fully exercised. They will carry a yield to maturity of 3.00%. Vishay may not redeem the LYONs prior to June 4, 2006, but may at the option of the holders be required to purchase the LYONs at their accreted value on June 4 of each of 2004, 2006, 2011 and 2016. Vishay may choose to pay the purchase price for these repurchases in cash and/or common stock. The offering is scheduled to close on June 4, 2001.