Date of announcement 2023/04/24
Time of announcement 17:01:42
Date of events 2023/04/24
To which item it meets paragraph 11
1.Date of the board of directors resolution:2023/04/24
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):N/A
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%:N/A
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.