SHANGHAI, May 5 /PRNewswire-Asia-FirstCall/ -- Spreadtrum Communications, Inc. (Nasdaq: SPRD, the "Company"), one of China’s leading wireless baseband chipset providers, today announced that its Chinese subsidiary, Spreadtrum Communications (Shanghai) Co., Ltd., has received RMB 300 million (approximately $44 million) of new financing from a Chinese bank in the form of a fixed term loan.
The bank loan is unsecured and is for a term of 3 years. Interest on borrowings will be initially set at 5.4% annually, to be reset annually at the then benchmark applicable rate as set by the People’s Bank of China. The interest on borrowings under this bank loan will be mostly covered by Chinese government subsidy funds.
"We very much appreciate and are excited to receive this nearly
interest-free financing. This indicates the Chinese government’s strong support and high confidence in Spreadtrum to develop semiconductor products in 2nd and 3rd generation wireless communications in the Chinese market. We plan to use our borrowings under the loan to increase R&D investment in our GSM and TD-SCDMA projects and to expand our IC operations in China. With our strengthened financial position, we are more confident in our ability to overcome the difficulties caused by the current worldwide economic and financial crisis and do not expect to need to raise additional funds in the near future," said Dr. Leo Li, president and chief executive officer of Spreadtrum Communications, Inc.
About Spreadtrum Communications, Inc.:
Spreadtrum Communications, Inc. (NASDAQ: SPRD; the "Company") is a fabless semiconductor company that designs, develops, and markets baseband processor solutions for the mobile wireless communications market. The Company combines its semiconductor design expertise with its software development capabilities to deliver highly-integrated baseband processors with multimedia functionality and power management. The Company has developed its solutions based on an open development platform, enabling its customers to develop customized wireless products that are feature-rich and meet their cost and time-to-market requirements.
Safe Harbor Statements:
This press release contains "forward-looking statements" within the meaning of the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. Such forward-looking statements include, without limitation, statements regarding our plans to use loan proceeds to increase R&D investments in GSM and TD-SCDMA projects and expand IC operations in China, our ability to overcome the difficulties in the current worldwide economic and financial crisis and our expectation that we will not need to raise additional funds in the near future. These statements are forward-looking in nature and involve risks and uncertainties that may cause actual market trends and the Company’s actual results to differ materially from those expressed or implied in these forward-looking statements for a variety of reasons. Potential risks and uncertainties include, but are not limited to, Chinese government’s continued support of the Company, availability of capital to support the Company’s future needs, the need for additional funding and the risk that financing may not be obtained, continuing weak industry demand and the effect of such weakness on revenue, continuing difficulties caused by the current worldwide economic and financial crisis, and changes in political, economic, legal and social conditions in China. For additional discussion of these risks and uncertainties and other factors, please consider the information contained in the Company’s filings with the U.S. Securities and Exchange Commission (the "SEC"), including the annual report on Form 20-F filed on June 30, 2008, especially the sections under "Risk Factors" and "Management’s Discussion and Analysis of Financial Condition and Results of Operations," and such other documents that the Company may file with the SEC from time to time, including on Form 6-K. The Company assumes no obligation to update any forward-looking statements, which apply only as of the date of this press release.
