25 January 2011

Epistar raising US$280m via bond issue

Taiwan’s largest LED chip maker Epistar Corp has set a conversion price of NT$132.6 (US$4.57) — a 30% premium over the firm’s 18 January closing price of NT$102 — to raise US$280m from its euro convertible bond (ECB) issue (announced in a Taiwan Stock Exchange filing on 23 December).

The zero-interest ECBs have a 5-year maturity and offer a put option after three years if Epistar’s stock price does not reach the conversion price. The issuer may also redeem the bond after 3 years, subject to a 130% trigger. The bond issue is said to be 10–15-times over-subscribed, having received orders from more than 180 institutional investors, including strong demand from overseas.

Proceeds from the issue (Epistar’s third such undertaking) will be used to repay US dollar loans (in order to reduce interest payments) and to purchase manufacturing equipment, especially metal-organic chemical vapor deposition (MOCVD) reactors (in order to increase output).

Epistar plans to expand capacity by about 40% this year, including 25% in first-half 2011 alone, says Primasia Securities Co in a client note.

See related items:

Epistar expects 25–30% growth in 2011; plans $280m bond issue

Tags: Epistar LEDs MOCVD

Visit: www.epistar.com.tw

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