Date of announcement 2022/04/26
Time of announcement 19:54:56
Date of events 2022/04/25
To which item it meets paragraph 11
1.Date of the board of directors resolution:2022/04/25 2.Types of securities privately placed: Common shares or preferred shares through private placement 3.Counterparties for private placement and their relationship with the Company: In no event may a placee under private placement be an insider or a related party of the Company. As of this point, the Company has no confirmed placees. The placees must meet the eligibility requirements of Article 43-6 of the Securities and Exchange Act, and the Company will give priority to large-scale domestic or foreign institutions, in order to develop stable and long-term partnership with strategic investors and enhance the Company’s market competitiveness through capital participation, business cooperation and experience exchange. 4.Number of shares or bonds privately placed:No more than 2.5 billion shares 5.Amount limit of the private placement:No more than 2.5 billion shares 6.Pricing basis of private placement and its reasonableness: (1)According to Article 43-6 of the Securities and Exchange Act and the “Directions for Public Companies Conducting Private Placements of Securities”, the price of the common shares subscribed through private placement shall be no less than 80% of the higher of the following reference prices: (a)The simple arithmetical average closing price of the common shares for either one, three or five business days before the pricing date, after adjustment for any distribution of stock dividends, cash dividends or capital reduction. (b)The simple arithmetical average closing price of the common shares for the 30 business days before the pricing date, after adjustment for any distribution of stock dividends, cash dividends, or capital reduction. (2)The price of preferred shares to be subscribed through private placement shall not be lower than 80% of the theoretical price in accordance with relevant laws and regulations and the Company’s Articles of Incorporation. (3)The private placement pricing is according to relevant laws and regulations and with reference to recent market prices. Also, the rights and obligations of privately placed preferred shares are according to the Company's articles of incorporation. The above provides an overall explanation of the reasonableness of the pricing and terms set for the private placement. 7.Use of the funds raised in this private placement: The funds from the private placement are expected to be used for one or more of the following purposes: fund working capital, stabilize financial structure, improve capital adequacy ratio, repay loans, or meet the Company’s long-term strategic development needs. It is expected that the capital increase will strengthen the Company’s competitiveness and enhance operational efficiency. 8.Reason for conducting non-public offering: Private placement allows strategic partners to acquire the Company’s shares in one transaction, which will facilitate the Company’s acquisition of the funds, skills, experience, and channels of the strategic partners. Given the securities acquired through private placement are not freely transferable for three years, long-term partnership between the Company and strategic investors is further ensured. Moreover, conducting a private placement can maintain stability of the Company’s share price. 9.Objections or qualified opinions from independent directors:None 10.Actual price determination date:To be decided. 11.Reference price:To be decided. 12.Actual private placement price, and conversion or subscription price: To be decided. 13.Rights and obligations of these new shares privately placed: (1)The rights and obligations of the newly issued common shares are the same as the existing common shares. (2) The rights and obligations and other substantial issuance conditions of the Company's preferred shares are as below: a. If the Company has a surplus after the year-end final accounts, it should first pay taxes and make up the losses accumulated from preceding years. After setting aside the legal reserve and setting aside or reversing the special reserve as required by law, if there is any remaining balance, it may first distribute the dividends for the year to which the preferred shares are entitled. b. The dividend rate is capped at 8%, per annum on the issue price per share. Cash dividend is paid annually at one time, and the Board of Directors will set the record date for the distribution of the preceding year’s dividend once the financial report has been approved by shareholders at the Annual Shareholders’ Meeting. The amount of dividends paid in the year of private placement and the amount of dividends received in the year of redemption are calculated based on the actual number of days the preferred shares are outstanding in that year. c. The Company has the discretion to distribute dividends on the preferred shares. If the Company has no or insufficient surplus to distribute dividends on the preferred shares in its annual accounts, or if the distribution of dividends on the preferred shares will cause the Company’s capital adequacy ratio to fall below the minimum requirements set by law or by the competent authorities, or if there are other necessary considerations, the Company may resolve not to distribute dividends on the preferred shares and the preferred shareholders shall not raise objections. If the preferred shares are non-cumulative, undistributed dividends or dividend shortfalls will not be accumulated and deferred in coming years. d. If the preferred shares are non-participative, preferred shareholders shall not participate in the distribution of earnings and capital surplus in cash and capitalization of common shares, except for the dividends set forth in sub-paragraph 2 above. e. The preferred shareholders shall have priority in the distribution of the residual assets of the Company over the common shareholders, and all preferred shareholders, irrespective of classes of shares, shall rank pari passu, provided that such distribution shall not exceed the respective issue amounts. f. The preferred shareholders shall not have voting rights at Shareholders’ Meetings, but may be elected as directors. Notwithstanding the foregoing, the preferred shareholders shall have voting rights at separate meetings of preferred shareholders and at Shareholders’ Meetings where a resolution concerning the rights and obligations of preferred shareholders is deliberated. g. Preferred shares shall not be converted into common shares within one year from the date of Closing. It is proposed that Board of the Directors be authorized to decide the period for the conversion in the term and conditions of the private placement. The preferred shareholders are entitled to convert all or part of their preferred shares to common shares based on a conversion ratio of 1:1 according to the conditions of the private placement. The common shares converted from the preferred shares are entitled to the same rights and obligations with common shares. The distribution of the dividends in the year of the conversion shall be calculated on the basis of the actual number of days the preferred shares being outstanding before the conversion in that year. The common shares converted before the ex-dividend date shall not participate in the distribution of the dividends of preferred shares in that year and onward, but are entitled to participate in the distribution of earnings and capital surplus to common shareholders. h. If the preferred shares issued by the Company have no maturity date, the preferred shareholders have no right to require the Company to redeem the preferred shares held by them. The Company may redeem all or part of the preferred shares issued at the actual issue price at any time after the 7th anniversary from the date of Closing and the rights and obligations of the un-redeemed preferred shares shall continue to be subject to the aforementioned terms of private placement. If the Company decides to pay dividends in the then-current year, the dividends payable as of the date of redemption are calculated based on the actual number of days the preferred shares are outstanding in that year. i. If the preferred shares are not perpetual, the maturity date shall not be earlier than the 7th anniversary of the Closing. The preferred shareholders have no right to require the Company to redeem the preferred shares held by them. On the maturity date or any time from the next day of the 7th anniversary of the Closing, the Company is entitled to redeem the preferred shares in cash or by other considerations permitted by laws at issue price and in accordance with the terms and conditions of the private placement. Where the Company is unable to redeem all or part of the preferred shares that have become mature due to force majeure or other circumstances beyond reasonable control, the terms and conditions of the private placement still apply to the un-redeemed preferred shares and their rights and obligations shall remain unchanged until redemption by the Company. j. It is proposed that the Board of Directors be fully authorized to determine the name, date of Closing and details of conditions of the preferred shares in accordance with laws and regulations, the Articles of Incorporation of the Company, market conditions and investors’ willingness for the subscription. 14.Record date for any additional share exchange, stock swap, or subscription:To be decided. 15.Possible dilution of equity in case of any additional share exchange, stock swap, or subscription:To be decided. 16.For additional share exchange or subscription, possible influence of change in shareholding ratio of TWSE-listed common shares if all privately placed corporate bonds are converted and shares subscribed for (no.of TWSE - listed common shares (A), (A) / common shares issued):NA 17.Please explain any countermeasures for lower circulation in shareholding if the aforesaid estimated no.of TWSE -listed common shares does not reach 60million and the ratio does not reach 25%:NA 18.Any other matters that need to be specified: The securities of this private placement may not be sold for a period of three years from the date of Closing, except for resale to those transferees in accordance with Article 43-8 of the Securities and Exchange Act. It is proposed that three years following the date of Closing of the Company’s shares through private placement, the Board of Directors be authorized to determine, in consideration of the-then situation and in accordance with the relevant regulations, whether or not to obtain a consent letter from the Taiwan Stock Exchange Corporation, to apply to the FSC for post registration of public issuance, and to apply for listing of such shares.