A China-based subsidiary of United Microelectronics Corp (UMC, 聯電) has submitted an application to launch an initial public offering (IPO) on the Shanghai Stock Exchange.
UMC in a statement on Friday said that Hejian Technology (Suzhou) Co (和艦科技) plans to debut A-shares on the stock exchange’s science and technology innovation board, which is a NASDAQ-like trading platform.
Chinese media reported that the registration-based listing procedure of the technology board can reduce regulatory red tape and streamline the IPO process.
The board also allows firms that are in the red to list their shares, they said.
The stock exchange said on Friday on its Web site that since it began accepting applications on Monday last week, it has received nine applications for listing on the technology board, including one from Hejian.
The companies are expected to raise a total of about 10.98 billion yuan (US$1.64 billion) and Hejian has the highest target of 2.5 billion yuan, the reports said.
Hejian reported net losses of 146 million yuan last year.
The company attributed the losses largely to deducting subsidiary United Semiconductor (Xiamen) Co’s (聯芯) depreciation and amortization costs from its fixed assets, which pushed its gross margin into negative territory.
Hejian plans to issue up to 400 million shares in the listing, which would account for no more than 10 percent of the company’s total shares, and the funds raised from the IPO would be used to expand capacity and as working capital, UMC said.
After the IPO, UMC’s stake in Hejian is to drop to 87.24 percent from 98.14 percent, it said.
Hejian’s core business is the production of eight-inch wafers by using 0.11, 0.13, 0.18, 0.25, 0.35 and 0.5 micrometer processes.
The company posted revenue of NT$3.57 billion (US$115.89 million) last year, with eight-inch wafers and 12-inch wafers accounting for 62.21 percent and 36.85 percent respectively.
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