AU Optronics' plans to raise as much as $350 million U.S. 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.
Shares in the Taiwanese company, which supplies screens for Apple Inc's iPad mini, surged their 7% 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).
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.
The company earlier this month posted a net loss for a second year in a row in 2012 as panel oversupply weighed on the industry.
The loss forced it to forgo a dividend payment, which it announced along with the rights issue late on Monday. It also said it would cut its capital expenditure budget by T$8.6 billion ($290 million U.S.).
The company has T$77 billion cash in hand, which is more than enough to cover short-term debt of T$54 billion out of total borrowings of T$220 billion.
AU's stock has bounced more than 15% from a three-month low hit late last week, as its prospects brighten. It nevertheless is virtually flat with its level at the start of last year, compared with a nearly 15% rise in Taiwan's benchmark index.
Tech Insider
