Taiwanese handset vendor Inventec Appliances Corp (英華達) plans to raise US$100 million through an overseas share sale in the first half of next year, following an initial public offering on the local bourse that is scheduled for next week, a company executive said yesterday.
"The proceeds will be used to expand production facilities for our Chinese plants after obtaining approval [from Beijing] to sell our own-brand handsets in China," said executive Ivan Tseng (曾慶安).
The company has two plants in Shanghai and Nanjing, in addition to its three plants in northern Taiwan.
Inventec Appliances is known in Taiwan for its OKWAP handset brand. Its contract business includes making the iPod digital music player for Apple Computer Inc and global positioning system (GPS) devices for Europe's top navigation equipment vendor, TomTom International BV.
The company also acquired the latest order from Apple to assemble the recently unveiled video iPod, beating rivals such as Hon Hai Precision Industry Co (鴻海精密) and Asustek Computer Inc (華碩電腦).
Inventec Appliances shareholders yesterday gave the green light to the proposed sale of 30 million common shares at maximum in the form of global depositary receipt (GDR). The firm is scheduled to issue GDRs by the second quarter of next year, Tseng said.
At home, Inventec Appliances is set to list the company's 310 million shares on the Taiwan Stock Exchange next Tuesday, and float 23 million new shares at a price of NT$108 (US$3.22) per share.
The company will raise NT$2.48 billion via the IPO, Tseng said. The offering was over-subscribed 10 times on high demand, he said.
Inventec Appliances has not set a price for the GDR yet, but it expects to raise roughly US$100 million through the issuance, Tseng said.
Inventec Appliances, which is about 49 percent owned by the world's No. 4 laptop computer maker Inventec Co (英業達), expects sales of its brand-name phones to double next year. The company said it would sell 2 million GSM mobile phones in Taiwan and China this year, without giving a breakdown by country.
Shares of the company, which are traded on the nation's gray market ahead of listing, slid two percent to NT$142.5 yesterday, around 32 percent higher than its IPO price of NT$108 a share.
"The stock is appealing because of the big price gap [between the IPO price and its share price in the local gray market]," said Vincent Chen (陳豊丰), an analyst with CLSA Ltd's Taipei branch (里昂證券).
But Chen suggested that investors stay on the sidelines just after the IPO due to the stock's limited upside.
Inventec Appliances' earnings grew 50 percent to NT$1.36 billion, or NT$4.4 a share, for the first half of this year, boosted by robust sales of digital music players and GPS devices. Chen expects earnings to rise to NT$9.5 per share this year, compared to last year's NT$7.74. per share.
In the first three quarters, sales jumped 70 percent to NT$72 billion from a year earlier, with a bulky 85 percent from original equipment manufacturing (OEM) business.
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