Taiwan Nanya Tech shareholders OK new issue

By Baker Li

TAOYUAN, Taiwan, June 25 (Reuters) - Shareholders of Taiwan's Nanya Tech (2408.TW) on Wednesday approved a plan to issue $269 million worth of new shares, as the company and its peers seek to raise cash amid a sharp downturn in the DRAM memory chip sector.

Under the plan, Nanya will issue up to 600 million new ordinary shares, which could be sold either domestically or packaged for a global depositary receipt (GDR) offering, the company said.

It added the funds would be used to expand its facilities.

At Nanya's current price of about T$13.65, the offering would raise up to $269 million.

The move would follow Nanya's issue of 500 million shares last year, which raised T$12 billion ($394.5 million).

It also previously said it was in talks with banks for a T$20 billion syndicated loan, which it expects to receive in the second half of this year.

Separately, Nanya's cross-town rival, Powerchip (5346.TWO), Taiwan's top maker of DRAM memory chips, said on Wednesday its board approved a plan to raise up to T$3 billion through a private equity placement to boost working capital.

That announcement came after Powerchip said in April it was considering raising up to $350 million by issuing an overseas exchangeable corporate bond to raise funds to buy raw materials.

Nanya, Powerchip and other makers of dynamic random access memory (DRAM), which is used primarily for PCs, are struggling in a battered sector that has seen prices plunge over the last year, though some analysts expect a recovery in the second half of this year.

Nanya, whose shares are down 25 percent this year, posted a T$8.78 billion loss in the first quarter of 2008, its fourth consecutive loss, while Powerchip lost T$9.74 billion.

Earlier this year, Nanya Technology and larger U.S. rival Micron Technology Inc (MU.N) signed an agreement to set up a new chip joint venture, which could lead to Micron replacing Qimonda QI.N as Nanya's advanced technology partner.

As part of the venture, an eight-inch Nanya plant in Taiwan will be upgraded to more advanced 12-inch technology starting this year, with the facility coming online for production in 2009.

Nanya shares were unchanged midway through the Taiwan trading day on Wednesday, while Powerchip shares, which are down more than 30 percent this year, were down 1.75 percent.