Corporate bonds

Yageo to issue up to NT$10 billion in corporate bonds

Taipei, Nov 12 (CNA) Yageo Corp., a leading Taiwanese manufacturer of passive electronic components, will issue up to NT$10 billion ($360 billion) in corporate bonds to boost working capital after the approval of this decision by its board of directors on Thursday.

In a statement late Thursday, Yageo, which makes chip resistors, inductors and multilayer ceramic capacitors (MLCCs), said it would raise funds through sales of unsecured bonds with a maturity no not exceeding 10 years.

Yageo said the proceeds from the bond sales will be used to fund the company’s long-term development and production expansion and repay some of its debts.

The bonds will be issued in one tranche or in multiple tranches, carrying a fixed coupon rate, the company said, but it did not give a specific timetable for the sale of the bonds.

Yageo will issue corporate bonds for the second time this year following a NT$10 billion sale of unsecured bonds in March, reflecting its aggressive growth strategy, including through acquisitions and mergers.

Last year, Yageo acquired US rival Kemet Corp. for $1.64 billion to consolidate its position as the world’s third-largest MLCC provider.

According to Yageo, Kemet employed 14,000 people at 23 factories in 22 countries in Europe, Asia and the United States before the transaction.

In 2018, Yageo acquired another US company, Pulse Electronics Corp., for NT$22 billion.

Thursday’s board meeting also approved a plan to restructure its overseas operations to reduce its tax liabilities.

Yageo posted a net profit of NT$6.81 billion in the third quarter, up 7.6% from the previous quarter and 87.9% from the previous year, thanks to a product portfolio in improvement including components for more high-end devices.

In the first nine months of 2021, Yageo’s net profit increased by 95.7% year-on-year to NT$18.15 billion, resulting in earnings per share of 36. NT$79. Consolidated sales totaled NT$80.85 billion, up 77.9% from the previous year.

The company’s consolidated October sales, however, fell 12.3% from the previous month to NT$8.61 billion following an extended holiday to observe the October 1 national holiday in China, where it manufactures most of its products.

Yageo’s sales also suffered from a shortage of raw materials for its production lines and power rationing in China.

(By Chung Jung-feng and Frances Huang)

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