Chip maker NXP to buy back debt

Chip maker NXP on Tuesday took steps to reduce its debt package of $6bn by offering bond holders an exchange for shorter-term, priority notes and said it expects first 2009 quarter sales to be down 40%.

The Financieele Dagblad said last week that NXP was involved in top secret preparations to cut its debt.
News agency Reuters said that a restructuring has been expected for some time because the economic downturn has hurt markets for its chips for digital tvs, mobile phones and cars. NXP’s US rival Freescale made a similar debt exchange offer last month.
The debt swap announcement coincided with the publication of NXP’s annual results, which showed a 25% reduction in sales in the fourth quarter of last year.
NXP is owned by a group of private equity firms under the leadership of KKR. Philips, which sold 80% of the firm in 2006 for €7bn, still owns 20%.

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