“AU Optronics’ plans to raise as much as $350 million in an overseas share issue sparked a surge in its shares, signaling that strong demand for high-definition displays in tablets and TVs is breathing new life into the loss-making panel maker’s fortunes,” Faith Hung reports for Reuters.
“Shares in the Taiwanese company, which supplies screens for Apple Inc’s iPad mini, surged their 7 percent daily limit for a second day in a row on Tuesday after it announced plans to sell 640 million to 800 million shares as American depositary receipts (ADRs),” Hung reports. “The company did not put a figure on how much it aimed to raise or how the money would be used, saying only that proceeds from the sale will be used for raw material purchases. At AU’s latest share price, the issue could raise up to $350 million.”
Hung reports, “‘The cut in capex is in line with their peers in Taiwan. In the past 10 years capex was for new capacity, but the industry is in an oversupply situation now,’ said one technology analyst at a European bank… ‘The operating cash flow is improving and they should be able to pay down debt. They are in a better financial position compared with previous years so they should be able to negotiate new loans and be in a better position to raise money in the market as their customers are top-tier names, including Apple.'”
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