Hon Hai plans to raise funds overseas, report says
Apr 26, 2004
According to a Reuters report, Taiwan's largest maker of electronic components, Hon Hai Precision Industry Co (Taiwan:2317.TW), said it plans an overseas share issue that will allow investors to tap into booming global tech demand.
The report went on to say - Chairman Terry Gou, who owns 23 percent of Hon Hai, will sell some of his shares in a pilot American Depository Receipt (ADR) issue worth about T$10 billion ($303 million) in the first half of the year, the Commercial Times said.
A Hon Hai official confirmed the company, which assembles desktop computers for big U.S. brands like Dell Inc, is planning an offshore fundraising, but declined to give details.
Foreign investors already own 55 percent of Hon Hai, which has a market capitalisation of about US$12 billion, and analysts said it is a good time to invest because of strong fundamentals. "Hon Hai is solid, so we think its overseas share issue will be attractive," said Tony Tseng, vice president of equity research at Merrill Lynch Taiwan. He saw upside for Hon Hai's shares, which have underperformed the market due to a patent lawsuit with FCI, a connector unit of France's Areva Group, that has since been settled.
Hon Hai shares ended up 0.69 percent at T$146.00 on Monday. The shares have fallen 1.4 percent over the past two months, while the TAIEX slipped 0.6 percent.