Taipei, July 19, 201 2 (CENS)--Chimei-Innolux Corp., a leading Taiwanese FPD (flat panel display) maker, announced yesterday (July 18) a plan for cash capital increment and issuance of global depository receipt (GDR), totaling NT$16.25 billion in scale.

Plus the previous plan of NT$6 billion cash capital increment, the company will raise NT$22.25 billion of fund, more than the fund-raising requirement of the creditor banking consortium this year. The move will facilitate effort of the company to obtain preferential interest rates from the banking consortium and lower the pressure for debt repayment.

Chimei-Innolux has reached an agreement with the creditor banking consortium for extending the repayment of its NT$200 billion long-term debt, which will be repaid in five years.

The company will have to repay banking debt of NT$16 billion this year and NT$30 billion next year. The fund raised from capital increment will be used to repay the debt this year.

Chimei-Innolux previously pledged to carry out over NT$20 billion of capital increment, in exchange for preferential rates for its banking loans. The fulfillment of the cash capital increment and GDR plan will help the company obtain preferential loan rates from the creditor banking consortium and lower its debt pressure.

However, due to its low share price, which closed at NT$10.25 yesterday, the company will have float more new shares for its capital increment and GDR plan, which will bloat its capital and affect the profit level per share.

Presently, the company's paid-in capital stands at NT$67.42 billion and the amount will be bloated to over NT$90 billion, after the completion of the capital increment and GDP plan.

Market players originally expected that Chimei-Innolux would raise fresh fund via private share placement, to be subscribed by Hon Hai Group. The move would enable Hon Hai to dominate the management of the company and spare the company the high expenses for floating GDR. However, Hon Hai is occupied by the plan of buying into Sharp and building a FPD plant in Brazil; it thus doesn't have the capability to take part in the private share placement plan of Chimei-Innolux.