Benq Corp (明電), Taiwan's largest mobile-phone maker, may seek to raise up to NT$7.4 billion (US$212 million) in an overseas share sale, joining a growing number of companies betting that rising stock prices mean investors are keen to buy new stock.
Benq will ask its shareholders at a May 24 meeting to approve a plan to sell as many as 100 million shares, said spokesman Alex Liou. The sale would be worth NT$7.4 billion based on the stock's closing price of NT$74 today.
"It's using the opportunity of an economy on the mend and rising share price to raise more money," said Edward Su, who helps manage NT$4.2 billion in stocks, including Benq, at Barits Securities Investment Trust Co (倍利投信). Overseas sales give companies an edge in investing in China. Taiwan currently restricts companies from using funds raised on the island to invest in plants or companies in China. Last year, the government said it would increase the portion of funds publicly traded companies may invest in China from capital raised overseas.
"Investment is more convenient if we raise money overseas," Liou said.
Taiwan's electronics companies are reviving fund-raising plans to finance expansion as a rebounding US economy lifts expectations that demand for computers and mobile phones will rise. That, in turn, has boosted share prices. Benq's shares more than tripled in value since touching a 52-week low on Oct. 18.
The company didn't disclose where it might seek to sell. Yesterday, Macronix International Co (旺宏電子), Taiwan's largest maker of memory chips for consumer electronics, said it would sell shares overseas, raising as much as NT$24.5 billion to fund a new chip plant. An sale planned last year foundered after the company's shares slipped almost two-thirds as chip demand and prices tumbled.
In February, Nanya Technology Corp (南亞科技), whose shares have risen almost sixfold since Oct. 8, received regulatory approval to raise as much as US$600 million in the second quarter to build a new plant.
Benq, which made 6.8 million handsets in 2001, will use the proceeds from its sale for "overseas procurement and to reduce exchange rate risks," according to a company statement.
Benq plans to boost production at a plant in China this year to half of total production from less than a third in 2001. The company, formerly known as Acer Communications & Multimedia Inc, plans to produce 1.5 million flat-panel displays on the mainland.
Last year, it made almost all its 1.2 million displays in Taiwan.
Benq, which makes mobile phones for Motorola Inc, also expects to make two-fifths of its handsets this year in China, after the Taiwan government scrapped certain restrictions on mainland investment, Liou said. In January, said it expects to make a third of its phones in China.
Benq shares were unchanged at NT$74.