Tower committed to raising $20 million by end of February

Tower Semiconductor (Nasdaq:TSEM) is committed to raising $20 million by the end of February as part its credit agreement with Bank Hapoalim and Bank Leumi, according to reports the company released last week.

The banks allocated Tower a $500 million credit line for establishing its Fab 2 in Migdal Ha'emek.

TheMarker learned that Tower and the banks agreed that the company can raise the capital in a variety of ways: a stock issue, an offering of convertible bonds and option warrants, exercise of options by banks and Tower workers, cash flow from the Fab 1 activity, or selling holdings in affiliates.

The commitment excludes investment by Tower's four strategic partners, SanDisk Corporation (Nasdaq:SNDK), Alliance Semiconductor (Nasdaq:ALSC), Macronix (Nasdaq:MXICY), and QuickLogic (Nasdaq:QUIK). Also excluded are funds the company received from the Investments Center of the Ministry of Industry and Trade.

The capital that Tower raised last month is intended to meet a prior commitment for raising $40 million by January 31, 2002. Tower fulfilled this commitment.

The agreement with the banks says that Tower has to raise $144 million by the end of 2003, $40 million of which has already been raised.

Tower has to raise $84 million over the coming 23 months, dbove and beyond the capital it has to raise by the end of February.

Tower is controlled by the Israel Corporation.

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