Taiwan Cement Corp, Taiwan’s leading cement producer, has resolved to issue 400m new common shares for capital increment by NT$10bn (US$322.58m), a move that ever seen in a decade.
The issuing price for the common shares is temporarily set at NT$25 per share. Company president CC Huang said Taiwan Cement will use the proceeds of the capital-increment project to redeem bank loans for cutting expenditure in interest.
Taiwan Cement said 10 per cent of the newly issued 400m common shares will be subscribed by employees, another 10% for sales through public trading and the remaining 80 per cnet will be subscribed by original shareholders.
A decade ago, Taiwan Cement launched a capital-increment project to fund the establishment of Hoping Power Plant. At present, Taiwan Cement holds a 60% stake in the Hoping Power Plant.
Taiwan Cement recently anticipated a substantial growth in sales and earnings in both Taiwan and China in the fourth quarter of this year and in the coming year, and therefore the company believed the capital-increment project won`t affect the rights of original shareholders.
With the injection of earnings of 120m renminbi (US$17.91m) from operations in China, Taiwan Cement scored NT$2.837bn in after-tax earnings in the first half of this year, up 32.8per cent YoY.
Taiwan Cement currently sees annual production capacity in China amount to 45Mt of cement. To grab the massive business opportunity in China market, the company will set up three new kilns there in 2011, which are expected to cost between US$200 million and US$300m.