Solar cell maker Gintech Energy Corp (昱晶能源) will seek to raise as much as US$49.7 million by issuing 28.24 million units of global depositary receipts (GDRs) — each of which represents one Gintech common share — at an average price of US$1.76 a share.
In a stock exchange filing yesterday, Gintech said it would use the proceeds from the GDR sale to repay bank loans and cut interest payment costs.
PRICING
With the pricing of each GDR equivalent to NT$60.51 for each common share (based on the exchange rate of NT$34.416 against the US dollar at the close of Taipei trading on Monday), the new shares are being sold at a 17.8 percent discount from the closing price of Gintech stock in Taiwan yesterday, when the company’s shares fell 1.47 percent to end at NT$73.6.
Gintech, whose headquarters are in Taipei’s Neihu Technology Park (內湖科技園區), began an overseas road show to market its planned GDR issuance in September last year.
COMPETITIVENESS
At the time, the company reportedly aimed to raise between US$160 million and US$170 million from the issue of 30 million GDRs and wanted to use two-thirds of the proceeds for raw material procurement and the rest for loan repayment. It delayed the issue in the face of the volatility in global equity markets.
While the GDR issuance is likely to dilute share value and earnings per share, “the capital enhancement effort would help increase the company’s competitiveness, lower its operational risk and thus benefit existing shareholders” in the long run, Gintech spokesman and chief financial officer Martin Kuo (郭彥辰) said in the stock exchange filing.
NO FOREIGN EXCHANGES
In contrast with market speculation, Gintech will not list the GDRs on any foreign stock exchange. The issue will be settled in Euroclear, Clearstream International and the Depository Trust & Clearing Corp, with the Bank of New York Mellon as the custodian bank, the company said.
Gintech has a solar cell production capacity of 660,000 kilowatts a year in Taiwan. Targeting European markets, especially Germany and Spain, the company also looks to enter the Japanese market on a contract-making basis, the Nikkei Shimbun business daily said in a report last month.
The company’s shares have gained 0.5 percent since the beginning of the year, compared with a 9.9 percent increase for the benchmark TAIEX index over the same period.
While sentiment for solar cell makers has improved recently as raw materials prices edged down, Gintech was rated “underweight” at HSBC Holdings PLC, which cited margin risk because of the firm’s higher exposure to long-term wafer supply contracts and therefore a lack of flexibility on sourcing raw materials.
HSBC offered a target price of NT$50 for Gintech, which represented a 32.1 percent downside from yesterday’s close, according to a HSBC client note issed on Tuesday.
Three experts in the high technology industry have said that US President Donald Trump’s pledge to impose higher tariffs on Taiwanese semiconductors is part of an effort to force Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) to the negotiating table. In a speech to Republicans on Jan. 27, Trump said he intends to impose tariffs on Taiwan to bring chip production to the US. “The incentive is going to be they’re not going to want to pay a 25, 50 or even a 100 percent tax,” he said. Darson Chiu (邱達生), an economics professor at Taichung-based Tunghai University and director-general of
Hon Hai Precision Industry Co (鴻海精密) is reportedly making another pass at Nissan Motor Co, as the Japanese automaker's tie-up with Honda Motor Co falls apart. Nissan shares rose as much as 6 percent after Taiwan’s Central News Agency reported that Hon Hai chairman Young Liu (劉揚偉) instructed former Nissan executive Jun Seki to connect with French carmaker Renault SA, which holds about 36 percent of Nissan’s stock. Hon Hai, the Taiwanese iPhone-maker also known as Foxconn Technology Group (富士康科技集團), was exploring an investment or buyout of Nissan last year, but backed off in December after the Japanese carmaker penned a deal
SUPPORT: The government said it would help firms deal with supply disruptions, after Trump signed orders imposing tariffs of 25 percent on imports from Canada and Mexico The government pledged to help companies with operations in Mexico, such as iPhone assembler Hon Hai Precision Industry Co (鴻海精密), also known as Foxconn Technology Group (富士康科技集團), shift production lines and investment if needed to deal with higher US tariffs. The Ministry of Economic Affairs yesterday announced measures to help local firms cope with the US tariff increases on Canada, Mexico, China and other potential areas. The ministry said that it would establish an investment and trade service center in the US to help Taiwanese firms assess the investment environment in different US states, plan supply chain relocation strategies and
WASHINGTON POLICY: Tariffs of 10 percent or more and other new costs are tipped to hit shipments of small parcels, cutting export growth by 1.3 percentage points The decision by US President Donald Trump to ban Chinese companies from using a US tariff loophole would hit tens of billions of dollars of trade and reduce China’s economic growth this year, according to new estimates by economists at Nomura Holdings Inc. According to Nomura’s estimates, last year companies such as Shein (希音) and PDD Holdings Inc’s (拼多多控股) Temu shipped US$46 billion of small parcels to the US to take advantage of the rule that allows items with a declared value under US$800 to enter the US tariff-free. Tariffs of 10 percent or more and other new costs would slash such