Chinese television and mobile phone maker, TCL Corp, said yesterday it would cut the size of a planned share placement because of a scale-back in investment in a subsidiary.
TCL would reduce the target size of the funds to be raised from a planned private placement to 1.4 billion yuan (US$205 million) from 1.7 billion yuan as its unit TCL Industries Holing (HK) Ltd no longer needed a fund injection, the company said in a statement to the Shenzhen Stock Exchange.
It is the second time the country's biggest listed electronics maker has made reductions to the share placement proposal. In December last year, it cut the private placement from 2.3 billion to 1.7 billion yuan. The current cut is pending approval from the stock regulator and a shareholders meeting scheduled for October 10.
Under the revised plan, TCL said that it would issue additional A-shares for no more than the funds it needed, compared with the previous 200 million to 440 million shares slated to a maximum of 10 institutional investors. Chairmen Li Dongsheng would still buy 18 percent of the new shares as a strategic investor.
The lackluster market had hindered fund raising through issuing additional shares, said Shi Hong from Industrial Securities Co. TCL said it needed the proceeds to expand LCD TV production as the sales of LCD TVs for the first eight months this year more than doubled to reach 2,231,078 units.
The company would spend 742 million yuan to make LCD TVs with screens of up to 42 inches and 654 million yuan to make TVs with screen sizes between 42 inches and 56 inches.
TCL closed up 1.42 percent at 2.85 yuan yesterday against a 0.86 percent rise in the Shenzhen Composite Index.
(Shanghai Daily September 25, 2008)
