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Spansion Inc. Announces Agreement to Purchase Distribution Business and Foundry Services From Former Japanese Subsidiary

Company on-track to emerge from Chapter 11 in the first quarter of 2010

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By: DAVID SAVASTANO

Contributing Editor, Coatings World and Ink World, Coatings World and Ink World Magazine

Spansion Inc. has reached verbal agreement to acquire the distribution business of its former subsidiary, Spansion Japan, that is the subject of a proceeding under the Japanese Corporate Reorganization Law (Kaisha Kosei Ho) pending in the Tokyo District Court.

Spansion also verbally approved a new foundry services agreement which would include wafer and sort services from Spansion Japan. In a hearing before the U.S. Bankruptcy Court, a representative of GE Financial Services Corporation, the agent for Spansion Japan’s syndicate of secured lenders, announced their support for the agreements, subject to final approval of the syndicate members. The agreements remain subject to completion of definitive agreements and approval by the U.S. Bankruptcy Court with jurisdiction over Spansion’s chapter 11 case as well as the Tokyo District Court.

“Upon court approval, these agreements finalize Spansion’s plan for manufacturing services and on-going support for Japanese customers as it continues its planned emergence from Chapter 11 in the first quarter of 2010,” said John Kispert, Spansion president and CEO. “We are pleased that this agreement will also help enable Spansion Japan to reorganize as a stand-alone entity.”

Spansion Japan would retain certain unsecured claims against Spansion Inc. that could be compromised under Spansion’s proposed plan of reorganization. Any awards related to these claims would be treated as pre-petition obligations and would not affect the company’s capital structure upon emergence from Chapter 11 bankruptcy. The complete definitive terms and conditions of the settlement will be filed with the U.S. Bankruptcy Court on or before Jan. 15, 2010. The U.S. Bankruptcy Court has scheduled a hearing to consider approval of the settlement on Jan. 29, 2010.

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