Chimei Innolux Corp (奇美電子), the nation’s top LCD panel maker, plans to raise NT$5.4 billion (US$180 million) by selling 600 million new shares as part of a fundraising plan to raise working capital and repay loans.
Chimei, the world’s third-largest LCD panel manufacturer after Samsung Electronics Co and LG Display Co, said in a filing to the Taiwan Stock Exchange on Monday that its board of directors had approved a proposal to sell the new shares at NT$9 each, which will boost the firm’s paid-in capital by 8.2 percent to NT$79.13 billion.
Eighty percent of the shares issued will be open to subscription by existing shareholders, including Hon Hai Precision Industry Co (鴻海精密), the world’s largest contract maker of electronics parts; 10 percent will be for subscription by employees and the other 10 percent by other investors, it said in a filing.
The share sale plan comes after the Miaoli-based company earlier this month reported net losses for eight consecutive quarters, as the flat-panel industry struggled with plummeting demand for LCD televisions and slim-screen computers.
On Aug. 7, the company said its net loss narrowed to NT$9.57 billion in the April-to-June quarter from NT$12.77 billion in the first quarter, and chairman Tuan Hsing-chien (段行建) said he expected further improvement this quarter.
The company said on July 18 that it was considering a plan to sell NT$16.25 billion of global depositary receipts later this year, but the date and terms of the GDR sale would be decided at a later date.
Shareholders on June 29 approved the company’s plan to either issue 2 billion new shares via private placement or sell NT$15 billion worth of bonds, in a bid to strengthen its financial structure.
During the Monday meeting, the board of directors also gave the greenlight to a management proposal to shut down the company’s Lunghua touch-panel adhesives unit in Shenzhen, Guangdong Province, China, because Chimei aims to focus on more value-added technologies for flat-panel display with integrated touch function.
The announcement was in line with the company’s earlier announcement that it wanted to simplify its business to focus more on its core flat-panel making operation. It will transfer its touch-panel adhesives business to Yeh Cheng Technology (業成), a subsidiary of Hon Hai which supplies touch-screen sensors and lamination.
Chimei shares fell 5.9 percent to NT$9.41 yesterday in Taipei trading, dragged down by the bourse’s weakness and affected also by investors’ concern that the share sale plan could dilute the company’s earnings per share.
The stock has declined 22.87 percent so far this year, underperforming the TAIEX, which has advanced 4.1 percent.