BenQ brings block

Taiwanese multimedia products manufacturer raises $187 million.

BenQ took advantage of positive share price momentum on Thursday (December 8) to raise $187 million from a 40 million unit GDR led by Citigroup.

The transaction has a split of 75% primary shares and 25% secondary shares. The latter comprised a sell-down by major shareholder Acer Corp, which saw its stake drop from 9.4% to 7.4%.

The deal was marketed on a range of $4.58 to $4.78, equating to a discount of 3% to 7%. It was priced at a 4.9% discount after the order book closed two times covered.

Some 27 accounts participated, of which 20 came from Asia and seven from Europe. This equated to a geographical split of 79% Asia and 21% Europe.

One of the European investors was Siemens AG, which subscribed to the equivalent of Eu50 million. This order relates to the terms and conditions of BenQ's acquisition of Siemens handset division earlier this year.

One of the company's major challenges lies in turning this division around. Management have said they believe BenQ will be able to break even in 2006 after reporting an expected loss in 2005. However, analysts say one of the major challenges will be execution risks associated with rationalising the German handset division.

On Wednesday, however, BenQ announced that November's consolidated sales were up 53% year-on-year to NT$22.3 million. The company is also now expected to ship 12 million handsets in the fourth quarter- a higher number than analysts had been forecasting.

Some now believe this will help reduce an expected loss for the full financial year. Having hit a year-to-date low of around the NT$28 mark in late October, the stock had bounced back to the NT$34 level as of Friday.

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