United Microelectronics to Raise $1.2 Bln From ADR Share Sale
4/29/00 3:20:00 AM
Source: Bloomberg News
Hinschu, Taiwan, April 29 (Bloomberg) -- United Microelectronics Corp., the world's second-largest subcontract manufacturer of computer logic chips, said it will raise about $1.2 billion by selling shares to international investors.
In a statement to the stock exchange, UMC said its board yesterday approved a plan to sell 450 million common shares in the form of American depositary receipts.
UMC first announced it was considering an ADR sale in February. Earlier this month, it set a 600-million share maximum size for the issue. Morgan Stanley Dean Witter & Co. will manage the transaction, which will take place within three months after Taiwan's Securities & Futures Commission approves it.
UMC will use the proceeds to buy equipment and expand capacity at two of its chip fabrication facilities, fabs 8D and 8E.
The price for each ADR hasn't been set yet, though UMC chairman Robert Tsao said at a shareholder meeting this month the company would only sell ADRs if it could obtain a premium.
Since many U.S. and global institutions can't buy Taiwan stocks, ADRs give Taiwan companies access to a broader investor base. That global demand often drives the ADR price higher than the company's local share price.
The New York Stock Exchange-listed ADRs of UMC's main rival Taiwan Semiconductor Manufacturing Co., for instance, traded at an average 56 percent premium during the past 12 months. |
