Semiconductor Manufacturing International Corp (中芯國際集成電路), China's biggest chipmaker, will need to conduct stock or debt offers to meet its expansion plans after raising as much as US$1.5 billion in a March share sale, it said in an offer document.
The sale's proceeds together with its current cash holdings "will not be sufficient to cover our planned capital expenditures," the company said in its filing to the US regulator. "We will require additional external financing," which may include additional share and debt offerings, it said.
About one-third of the proceeds from next month's sale will go to existing shareholders, said a banker involved. The company plans to sell as much as US$1 billion new shares in March, which will help fund upgrades for its plants in Shanghai and Tianjin and boost factory production in Beijing.
Semiconductor Manufacturing, which hasn't posted a profit since it was founded in 2000, is betting 20 percent growth in the industry will help it return to profit and lure investors to the sale. The company plans US$1.95 billion capital expenditure this year and US$1.37 billion next year, the filing shows. It didn't say how much of the company current shareholders plan to offer.
Hong Kong-listed Shanghai Industrial Holdings Ltd owns 12 percent of the company and Motorola Inc owns 11.4 percent. Other shareholders are Beijing Beida Jade Bird Software System Co, which has 6.8 percent, and a global fund owning 7.4 percent. Its own management, which includes founder Richard Chang and 14 other people, owns half of the company, the document said.
The chip manufacturer plans to start trading in New York on March 17 after winning approval from the US regulator to sell as much as US$1.5 billion in shares, a banker involved said.
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