Quanta Computer Inc (
Quanta hired Merrill Lynch & Co to manage the sale, the company said in a statement to the Taiwan Stock Exchange. The sale's proceeds will help buy production materials and provide operating cash, the company said.
The company canceled a US$220 million sale of convertible bonds on Aug. 14, citing unfavorable market conditions. The notebook-computer maker hired UBS Warburg LLC and Morgan Stanley in October to sell US$300 million of the bonds. That sale never happened. Its latest attempt comes amid an outbreak of a respiratory disease that has killed at least 725 people worldwide.
"I doubt the sale will come anytime soon given the SARS problem in Taiwan," said David Chapman, who helps manage US$650 million at Towry Law Asia HK Ltd. "They must be really desperate to try and raise money now."
Quanta spokesman Tim Li (
Quanta has US$230 million of outstanding convertible bonds which it sold in February 2001 through UBS Warburg. Those bonds don't pay interest and were sold with a conversion premium of 16 percent.
Investors favor convertible bonds when stocks are falling because they combine the protection offered by a bond and the potential to profit if the underlying shares rally.
Convertible bonds are cheaper for the company to sell than traditional debt because investors accept lower coupons in return for the option to switch into stocks.
Taishin Financial Holdings Co (台新金控), the owner of Taiwan's second-largest credit-card issuer, Quanta Display Inc (廣輝電子) and other Taiwanese companies have sold US$1.7 billion of convertible bonds this year.
That's one-third less than the US$2.48 billion sold during the same period last year. TAIEX is up about 7 percent so far this year.
Quanta said on April 30 that its first-quarter profit slipped 8.4 percent to NT$2.9 billion (US$83.6 million) from the same period a year ago. Sales gained 61 percent to NT$55.9 billion.
The sale of convertible bonds will be Merrill's second for a Taiwanese company this year.
The US investment bank helped Macronix International Co (