SHANGHAI, July 25 The world's fifth-largest LCD
panel maker, BOE Technology Group Co Ltd, said on
Thursday it plans to raise 46 billion yuan ($7.5 billion) in the
biggest Chinese equity offering this year.
The funds will be used in the construction of
high-generation panel production lines and the acquisition of
shares in an existing joint venture called BOE Display
The Shenzhen-listed company, with a market capitalization of
$5.1 billion, will offer 9.5-22.4 billion shares with an issue
price of 2.10 yuan per share in a private placement.
Excluding the part set aside for the acquisition of equity
in the venture, the company is expected to raise 37.5 billion
yuan in cash.
The company's shares tumbled 8.4 percent on Thursday as its
planned placement raised concerns the largest equity offering in
a year could put pressure on tight liquidity conditions on the
Similar to the company's refinancing programs in the past,
the new capital raising has support from local government-owned
companies, with three of them agreeing to buy a combined 20.83
billion yuan worth of shares in the placement, BOE said.
Beijing State-owned Assets Management will swap its 48.92
percent stake in Beijing BOE Display Technology to subscribe to
8.53 billion yuan worth of shares, while Hefei Jianxiang
Investment will take up 6 billion yuan worth through a cash or
debt-to-equity swap. Chongqing Yuzi will take up another 6.3
billion yuan of shares in cash.
Funds raised will be invested two TFT-LCD production lines,
one in Hefei and one in Chongqing, and an AM-OLED production
line in Ordos.
The Ordos production line is expected go into production in
November, while the Hefei line has been completed with equipment
being moved in. The Chongqing project has recently been signed,
with construction expected over the next 24 months.
($1 = 6.1360 Chinese yuan)
(Reporting by David Lin; Additional reporting by Clement Tan in
HONG KONG; Writing by Lavinia Mo in Hong Kong; Editing by Elzio
Barreto and Matt Driskill)