Siliconware Precision Industries Co (SPIL, 矽品精密), the world’s No. 3 chip tester and packager, has urged shareholders to support its proposal to raise authorized share capital by 10 percent in a bid to enhance financial flexibility to fund growth.
The firm’s managers have proposed expanding its authorized share capital from 3.6 billion to 3.96 billion shares via amending the company’s articles of incorporation.
“It is crucial to maintaining the financing flexibility required to adapt in a fast-changing environment,” company managers said in a letter issued to its shareholders on Friday.
“The proposed headroom [increase] could provide financing that helps to accelerate our expansions and optimize the potential of our facilities,” SPIL said in the letter.
The Taichung-based company said it intends to earmark extra investments in manufacturing equipment and facilities on a new plant in the Central Taiwan Science Park to provide advanced chip testing and packaging services, as well as on a Chinese subsidiary in Suzhou, China, to provide advanced capability to capture growing semiconductor industry in the country.
Capped by 3.6 billion shares in authorized capital, SPIL can only issue about another 6 percent of shares to finance projects to accelerate growth after deducting 3.12 billion outstanding shares and 245 million common new shares to be converted from corporate bonds due in 2019, company data show.
The proposed increase in authorized share capital would help SPIL increase the headroom to about 15 percent, according to SPIL’s calculations.
Even so, in terms of financial flexibility, SPIL would still lag behind Taiwan’s top 20 listed technology companies, including larger rival Advanced Semiconductor Engineering Inc (ASE, 日月光半導體), which have a higher headroom average at 26 percent between authorized and issued share capital, SPIL said.
The company said it has grown its total assets by more than 44 percent since 2007, but its authorized share capital has remained the same, which has “significantly limited the financing capability critical to operating in a highly competitive environment.”
SPIL managers have called on shareholders to vote yes to the proposal at an annual shareholder’s meeting scheduled for May 16.
ASE, which launched two takeover bids to buy SPIL since last year, would be able to vote on proposals from SPIL for the first time during the shareholder’s meeting as it has acquired 25 percent shares in SPIL as of March 18, a date set by SPIL for shareholders to verify their holding.
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