Chartered Semiconductor launches equity smash

Chartered Semiconductor has launched a secondary share sale of new and existing shares to raise $1.8 billion.

Chartered Semiconductor, the Singaporean computer chip manufacturer, today launched a massive new equity issue.

The sale is a combination of new shares issued by the company and existing shares held by the government and various customer shareholders.

The sale hopes to raise some $1.8 billion, which represents some 15.68% of the fully diluted issued share capital.

There is a 15% over-allotment option or greenshoe included in the deal as well.

The roadshow for the deal officially launched onáApril 10 with pricing for the issue coming eight days later on April 18. Such an accelerated roadshow is an attempt by the underwriters, Salomon Smith Barney and CSFB, to complete the deal as quickly as possible to avoid the market volatility.

Chartered Semiconductor is dual-listed on Nasdaq and the Stock Exchange of Singapore (SES). Some 37% of the shares sold in this deal will be new shares issued by the company, proceeds of which will be used to build the company's sixth chip factory.

Fifty-three percent of the sale represents existing shares in the company held by government-owned Singapore Technologies. Customer shareholders of Chartered, all based in the US - Alliance Semicon, Analog Devices and Actel - are selling the remaining 10% of the issue.

Record earnings

The deal comes hot on the heels of this morning's record earnings announcement by Chartered Semiconductor. In the first quarter 2000 Chartered made 29c per share, nearly double analysts' expectations of 15c a share. This represents an 82% jump compared to the first quarter 1999.

With this deal, Chartered will become the fourth largest company on the SES which should benefit shareholders if, as rumoured, the MSCI indexes are reweighted in Singapore's favour. After the sale is completed, Singapore Technologies will see its overall shareholding in Chartered Semiconductor fall 12.4% from 70.1% to 57.7%.

Share our publication on social media
Share our publication on social media