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

Yageo Corp., a leading Taiwanese passive electronics component maker, will issue up to NT$10 billion (US$360 billion) in corporate bonds to increase its working capital after the move was approved by its board Thursday.

In a statement released Thursday night, Yageo, which makes chip resistors, inductors and multi-layer ceramic capacitors (MLCC), said it will raise funds through unsecured bond sales with a maturity of no longer than 10 years.

Yageo said the proceeds from the bond sales will be used to finance the company's longer term development and production expansion and repay some of its debts.

The bonds will be issued in one tranche or in several tranches, carrying a fixed coupon rate, the company said, but it did not give an exact timeframe for the bond sale.

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

Last year, Yageo acquired U.S. rival Kemet Corp. for US$1.64 billion to cement its position as the world's third largest MLCC supplier.

According to Yageo, Kemet had a workforce of 14,000 at 23 plants in 22 countries across Europe, Asia and in the United States before the transaction.

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

The board meeting on Thursday also approved a plan to restructure its overseas businesses to lower its tax obligations.

Yageo posted a net profit of NT$6.81 billion in the third quarter, up 7.6 percent from a quarter earlier and up 87.9 percent from a year earlier on the strength of an improving product portfolio that included components for more high-end devices.

In the first nine months of 2021, Yageo's net profit rose 95.7 percent from a year earlier to NT$18.15 billion, translating to earnings per share of NT$36.79. Consolidated sales totaled NT$80.85 billion, up 77.9 percent from a year earlier.

The company's consolidated sales in October, however, fell 12.3 percent from a month earlier to NT$8.61 billion in the wake of a prolonged holiday to observe the Oct. 1 National Day holiday in China, where it manufactures most of its products.

Yageo's sales were also hurt by a shortage of raw materials for its production lines and power rationing in China.

Source: Focus Taiwan News Channel