TPK Holding Co (宸鴻) yesterday said it raised up to US$436 million by issuing new global depositary receipts (GDR) and overseas convertible bonds, according to the company’s filings to the Taiwan Stock Exchange before the market closed.
The supplier of touch-screens for Apple Inc’s iPhone and iPad said in a filing that it would start issuing the US$200 million zero-interest overseas convertible bonds on Monday, with an option to increase the bond offering to US$250 million.
The convertible bond issue is TPK’s second overseas fundraising since April last year, when it issued US$400 million in such bonds.
The company set a conversion price of NT$452.68 (US$15.43) for its five-year overseas convertible bond issuance, a 10.54 percent premium from Tuesday’s closing share price of NT$409.5.
Shares of TPK fell 3.79 percent to NT$394 yesterday on the Taiwan Stock Exchange.
With a zero coupon rate for the issue, the company said it is not required to pay cash interest when investors redeem the convertible bonds, which have a maturity date of Oct. 1, 2017.
In a separate filing, TPK said it would sell 17.6 million GDRs at US$13.4 each, expecting total proceeds of US$236 million.
The GDR price of US$13.4 apiece, or NT$393.53 in local currency, represents a 3.9 percent discount from Tuesday’s closing share price of NT$409.5
Proceeds from the issues of global depositary receipts and overseas convertible bonds will be used to expand capacity at its subsidiaries as well as purchase equipment and raw materials abroad, according to the filings.
The company said the potential share dilution is about 3.8 percent if investors exchange all their five-year convertible bonds for company stock, which TPK said would have a limited impact on interest for shareholders.
The potential share dilution from the GDR issuing is about 5.2 percent, it added.
Earlier this month, TPK reported better-than-expected consolidated revenues for last month, growing 14.59 percent from July to NT$12.96 billion and up 21.5 percent from in the same month last year.
Despite the loss of orders for touch screens for Apple’s iPhone 5, for which the US company uses so-called in-cell screens made by LG Display Co and Japan Display Inc, TPK has gradually expanded its business from Apple to non-Apple vendors, resulting in a potential upside for its third-quarter revenue, Jeff Pu (蒲得宇), an equity research analyst at Taipei-based Fubon Securities (富邦證券), said in a note on Wednesday last week.
However, Pu said the company’s sales momentum in the fourth quarter would depend on the sell-through of touch screens for Windows 8 notebooks.