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Chunghwa Picture Tubes issues US$125m in bonds

Chunghwa Picture Tubes Ltd (中華映管), the nation's third-biggest maker of liquid-crystal displays (LCDs), raised US$125 million selling bonds convertible into its shares, according to ABN Amro Rothschild, the sale's arranger.

The five-year, zero-coupon bonds can convert to Chunghwa Picture shares for NT$10.35 each, 13 percent more than the stock's closing price on Thursday, said Rene Mijne, Asia head of equity syndicate at ABN Amro Holdings NV's venture with NM Rothschild & Sons Ltd.

The sale attracted more than 140 investors and was 15 times covered, he said.

"We haven't seen a lot of paper out of Taiwan in the convertible bond sector," Mijne said in a telephone interview yesterday.

"Investors were very eager to get on board," he said.

The display industry in Asia has shown signs of a turnaround this year as falling prices of liquid-crystal TVs spur consumers to replace bulkier glass-tube televisions.

Flat panel television shipments rose 43 percent in the second quarter this year from 37 percent in the previous quarter, according to Austin, Texas-based DisplaySearch.

Warburg Pincus LLC said on Sept. 16 that it agreed to buy US$250 million in convertible bonds in Chunghwa Picture Tubes. The six-year bonds can be converted into 10.2 percent of the Taiwanese company.

The US buyout firm's purchase has "catalyzed" interest in the latest bonds sale, said Meighen Robertson, co-head of telecommunication, media and technology banking at ABN Amro in Asia.

Chunghwa Picture may sell an additional US$25 million of bonds to meet demand, according to sale documents.

Separately, TPV Technologies Ltd (冠捷科技), the world's largest contract maker of computer monitors, jumped the most in almost six years on the Hong Kong stock exchange after Chi Mei Optoelectronics Corp (奇美電子) agreed to buy a stake in the company.

TPV shares climbed 12 percent to HK$5.60 (US$0.72) at the close of trading, the biggest gain since September 2003. Chi Mei, Taiwan's second-largest maker of LCD panels, fell 0.9 percent to NT$37.90 in Taipei.

A partnership with Chi Mei, which is buying a 7.1 percent stake for HK$811.2 million (US$104.5 million), may help TPV ensure that it gets enough panels to make monitors and televisions.

"We view the arrangement with Chi Mei for TPV positively," David Lepper, an analyst at UBS AG, wrote in a report issued on Thursday. The supply of panels would be "tight heading into 2008." He rates TPV shares "buy."

Chi Mei agreed to pay HK$5.39 per share in the transaction, or 7.8 percent above TPV's last closing price. The Taiwanese company plans to subscribe to 150.5 million new TPV shares.

Citigroup Inc analyst Eddie Lau said the investment by Chi Mei may lead to TPV buying the computer monitor unit of the Tainan-based company.

In the first half, TPV had 23.2 percent of the global market for computer monitors based on LCD technology, ahead of Innolux Display Corp's (群創光電) 15.1 percent, the Hong Kong-based company said this month. Chi Mei was ranked eighth with a market share of 3.7 percent, according to TPV.

TPV became the world's biggest computer-monitor maker with the 2005 purchase of Royal Philips Electronics NV's computer monitor unit. TPV sold 17.9 million LCD monitors in the first half, up from 11.8 million a year earlier, it said this month.
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