Fri, Aug 10, 2007 - Page 12 News List

Innolux Display's board approves fundraising plan


Innolux Display Corp (群創光電), the world's No. 2 maker of liquid-crystal-display (LCD) computer monitors, plans to raise NT$55 billion (US$1.67 billion) to fund the construction of a new next-generation flat-panel plant by selling new shares overseas and issuing corporate bonds at home.

The Miaoli-based company's board okayed the offering of a maximum 300 million common shares, or 10 percent of the total outstanding shares, to overseas investors at NT$150 per share, it said in a statement released late on Wednesday night.

A 10 percent portion of the offering will be reserved for subscription by employees, while the offer price will be fixed during the issuance, it said.

In the statement, Innolux said it would use the proceeds to "build facilities and buy equipment." Innolux plans to build a 6th generation factory to manufacture LCD panels for computer monitors.

It also plans to sell NT$10 billion five-year corporate bonds at zero coupon, the company said in a separate statement.

Holders would be able to convert the bonds into Innolux shares when they mature five years after issuance, the statement said.

Innolux shares jumped 4.58 percent to NT$160 yesterday, better than the benchmark TAIEX index's 0.91 percent gain.

The company said it planned to complete the fund-raising projects by year's end and begin construction of the new plant in the first quarter of next year.

Innolux currently operates two panel factories and sources half of its LCD panels from other panel makers.

Morgan Stanley analyst Frank Wang (王安亞) said in a report released last month that he was concerned that a shortfall in panel supply during the peak LDC cycle next year could limit the company's growth.

Wang initiated the coverage of Innolux with an "equal-weight" rating last month with a 12-month target price of NT$130.

On Wednesday, Innolux posted net profits of NT$4.5 billion for the first six months of the year, rebounding from the net losses of NT$170 million it reported for the same period a year ago.

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