Yageo Corp., one of Taiwan’s largest passive electronics component suppliers, will list global depositary receipts (GDRs) in Luxembourg next week to raise funds to boost its production capacity and repay debts, the company said Wednesday.
Yageo, which makes chip resistors, inductors and multi-layer ceramic capacitors (MLCC), said in a statement it will issue 12.68 million GDRs on April 20, each of which will represent five Yageo common shares.
The GDRs have been priced at US$51.25 per unit, translating to a price of NT$308.1 (US$10.27) per common share, an 8.84 percent discount on Yageo’s closing price of NT$338.00 on the Taiwan Stock Exchange on Tuesday.
Based on the pricing, Yageo is expected to raise about US$6.5 billion, making the listing the largest overseas fundraising activity by any Taiwanese company since 2013, according to the company.
Yageo said the move should enhance its global visibility and strengthen its shareholder structure by bringing in more long-term foreign institutional investors.
Yageo’s GDRs are almost three times oversubscribed, indicating that foreign institutional investors have faith in the company’s business outlook and its long-term growth strategies, such as a plan announced in November 2019 to acquire U.S.-based Kemet Corp. for US$1.64 billion.
According to Yageo, Kemet, founded in 1919 and headquartered in Fort Lauderdale, Florida, owns 23 production sites in 22 countries in the U.S., Europe and Asia.
The acquisition, which is scheduled to be completed in the second half of 2020, should strengthen the company’s MLCC production and bolster its automotive and 5G applications, helping it secure more orders in the U.S., European and Japanese markets, analysts have said.
Yageo’s GDR sale plan was approved at a board meeting in March along with an overseas convertible bond sale aimed at raising up to US$1.13 billion.
In the statement, Yageo said it will continue to expand its production capacity worldwide to meet rising global demand for emerging technologies such as 5G and automotive electronics applications.
Last year, the company acquired Pulse Electronics Corp., another American company, for NT$22 billion, a deal that also set the company’s sights on automotive electronics and 5G applications.
According to market estimates, about 70 percent of Yageo’s production takes place in China.
Featured image: Yageo Chairman and CEO Pierre Chen, source: Focus Taiwan
