TAIPEI: Hon Hai Precision Industry Co has raised a total of US$1 billion from corporate bonds issued in two tranches, according to a statement filed with the Taiwan Stock Exchange on Thursday.
In the statement, Hon Hai said that through its fully owned subsidiary Foxconn (Far East) Ltd, it had sold US$600 million worth of five-year bonds with a 2.25 percent coupon and US$400 million worth of 10-year bonds with a 3 percent coupon.
Hon Hai said it plans to use the proceeds to fund capital expenditures, debt refinancing and for general corporate financing.
The bond sale was the biggest fundraising activity by Hon Hai since 2014, when it raised NT$94 billion (US$2.97 billion) in a rights issue and global depositary receipts, local media reported yesterday.
It was also the first time since 2010 that Hon Hai has raised US dollar-denominated funds, when it issued US$1 billion in overseas corporate bonds, the reports said.
Before its latest fundraising effort, Hon Hai had been sitting on more than NT$200 billion in cash, and the bond sales are expected to boost the company’s coffers to allow for more acquisitions and future expansion, according to the reports.
The interest rates on the Hon Hai bonds were relatively low, compared with an average of 3-4 percent in bond yields set in the global market, since the company has sound fundamentals and is creditworthy, analysts said.
Meanwhile, Japanese media yesterday reported that South Korea’s Samsung Electronics Co had disposed of its holdings in Sharp Corp after Hon Hai completed its acquisition of a 66 percent stake for US$3.5 billion last month.
Before Hon Hai’s acquisition, Samsung had held a 3 percent stake in Sharp, but its stake had been diluted by Hon Hai’s presence to 0.7 percent, the reports said
