Hon Hai to Issue US$1 Billion in Overseas Unsecured Convertible Bonds
To meet anticipated high growth, Hon Hai Precision Industry Co., Taiwan's largest electronic manufacturing service provider, will issue US$1 billion overseas unsecured convertible bonds, with the massive fund-raising drawing market attention and making institutional investors to expect the firm to engage in more M&As.
C.A. Ting, Hon Hai's vice president and spokesperson, said the bond issuance is to raise operating capital, adding that the sum is modest relative to Hon Hai's annual sales of approximately NT$2 trillion (about US$61.91 billion).
At the end of last year, Hon Hai's board of directors passed a proposal to issue NT$12 billion (US$371.51 million) in unsecured corporate bonds to increase operating capital and repay short-term liabilities.
Hon Hai had NT$34.679 billion (US$1.07 billion) in cash and equivalent cash in hand in the first three quarters of this year, compared with NT$10.142 billion (US$313.99 million) for that in last year. Despite the huge cash in hand, Hon Hai still aims to issue the massive corporate bonds.
Over the past few months, Hon Hai has expanded overseas presence with a PC factory in Chongqing, Sichuan province, China by cooperating with HP, acquired Sony Corp.'s Mexico plant, and will continue to deploy worldwide.