Chi Mei plans to sell 3 billion shares

Chi Mei Optoelectronics Corp (奇美電子), Taiwan's second-largest maker of flat-panel displays, plans to sell 3 billion shares to raise funds to expand production.

The company plans to sell 2.5 billion preferred shares in a private placement and 500 million common shares to overseas investors, company spokesman Eddie Chen (陳彥松) said in a telephone interview yesterday. The proceeds will be used to build production lines for flat panels used in computers and televisions.

Chen denied a Chinese-language newspaper report that said the shares will be worth NT$120 billion (US$3.8 billion). The company will price its preferred stock "much lower than the common stock's market price," Chen said.

"The market cannot absorb NT$120 billion worth of shares in one shot," he said.

The share-sale plan needs to be approved at a shareholders meeting scheduled for May 13.

Chi Mei plans to use the proceeds to build larger plants, betting it will help lower production costs and boost volume. The company on Feb. 1 said it expects first-quarter shipments to grow more than 10 percent from the previous three-month period as demand rebounds.

Global spending on equipment used to make liquid crystal displays will fall less than expected this year as companies expand production ahead of schedule, according to researcher DisplaySearch. Spending will fall 26 percent to US$9.31 billion this year.