Pricing of Unsecured Overseas Convertible Bonds
Subject: To Announce the Pricing of Unsecured Overseas Convertible Bonds Due 2029
Date of events:2024/10/17
Contents:
1.Date of occurrence of the event:2024/10/17
2.Company name :Hon Hai Precision Industry Co., Ltd.
3.Relationship to the Company (please enter "head office" or "subsidiaries"):Head Office
4.Reciprocal shareholding ratios: N.A.
5.Cause of occurrence: the Pricing of Unsecured Overseas Convertible Bonds
6.Countermeasures:None
7.Any other matters that need to be specified (the information disclosure also meets the requirements of Article 7, subparagraph 9 of the Securities and Exchange Act Enforcement Rules, which brings forth a significant impact on shareholders rights or the price of the securities on public companies.):
The announcement is made according to the approval of the Financial Supervisory Commission (Ref. No. 1130356704 ) dated September 18, 2024.
(1) Issue Amount, Denomination, Issue Price, Estimated Issue Date
Issue Amount: US$700,000,000
Denomination: US$200,000 or in any integral multiples of US$100,000 if exceeding US$200,000
Issue Price: 100% of par value
Estimated Issue Date: 2024/10/24
(2) Coupon Interest: 0% per annum
(3) Redemption on the Maturity Date: Unless previously redeemed, repurchased and cancelled or converted, the Bonds will be redeemed at their principal amount plus a yield calculated semi-annually at the rate of 0.00% per annum on the Maturity Date. Such redemption amount will be converted into NT dollars based on the Fixed Exchange Rate, and this fixed NT dollar amount will be converted using the prevailing exchange rate on the Maturity Date (using the fixing rate at 11:00 am, expressed as the number of NT dollars per one US dollar, quoted by Taipei Forex Inc.)for payment in US dollars.
(4) Conversion:
A. Converted Securities: Each Bondholder will have the right to convert the Bonds into the newly-issued common shares ("Common Shares") of the Company during the Conversion Period (as defined below) at the then Conversion Price.
B. Conversion Period: Unless previously redeemed, repurchased, and cancelled or converted and except during the Closed Period (as defined below), the Bonds may be converted into the Company's Common Shares at any time starting from the next day immediately after three months from the Issue Date to (1) the 30th day prior to the Maturity Date or (2) the 5th business day prior to the applicable purchase date on which a Bondholder exercises its put right or the applicable date (other than the Maturity Date) on which the Company exercises its redemption right (the "Conversion Period"). Under current ROC laws and regulations, the Closed Period is defined as below:
(a) The period commencing from 60 days prior to the date of the annual general shareholders' meeting, from 30 days prior to a special shareholders' meeting.
(b) In the event of free distribution of shares, distribution of cash divided or rights issues, the period from the fifteen business days prior to the commencement of the relevant closed period for such free distribution of shares, distribution of cash divided or rights issues to the record date for the distribution or allocation of the relevant dividends, rights and benefits.
(c) the period from the record date for the determination of the shareholders participating in any capital reduction to the first trading day immediately prior to the date on which the shares resume trading after such capital reduction.
(d) In the event of change of par value of the common shares of the Company, the closed period starts from the commencement of the suspension of the conversion in respect of the change of par value of the common shares to the day immediately preceding the date on which the reissued common shares resume trading after such change of par value of the common shares.
(e) such other periods during which the Company may be required to close its stock transfer books under the ROC laws or regulations of Taiwan Stock Exchange ("TWSE") applicable from time to time.
Where any ROC laws and regulations governing the Closed Period have been changed or amended, the changed or amended laws and regulations shall prevail and govern.
C. Conversion Price: NTD 300.00
D. Number of Common Shares to Be Delivered:
The number of Common Shares to be delivered upon conversion will be determined by dividing the principal amount of the Bonds (translated into NT Dollars at the rate of US$1.00=NT$32.1860 as determined on the pricing date, the "Fixed Exchange Rate") by the Conversion Price in effect on the date of conversion. The Company will compensate in cash for the amount of less than one Common Share. The calculation of the cash amount shall be rounded up to the nearest NT Dollars.
E. Adjustment of the Conversion Price:
After the issuance of the Bonds, the Conversion Price shall be adjusted in accordance with the relevant anti-dilution provisions in the Indenture.
F. Redemption at the Option of the Bondholders:
Bondholders shall not request the Company to redeem the Bonds in whole or in part prior to maturity except for the following conditions:
(a) In the event that the Company's common shares cease to be listed on the TWSE (a "Delisting Event"), each Bondholder shall have the right to require the Company to redeem such Bondholder's bonds, in whole but not in part, at an amount equal to 100% of their principal amount, plus a yield calculated semi-annually at the rate of 0.00% per annum on the days elapsed from the Issue Date to the date of the occurrence of any such event (on the basis of 360 days a year and 30 days a month). ("the Early Put Price").
(b) Upon the occurrence of a Change of Control as defined in the Indenture, each holder of the Bonds may request the Company to redeem the Bonds, in whole but not in part, at the Early Put Price.
(c) Unless the Bonds have been previously redeemed, repurchased and cancelled or converted, each Bondholder shall have the right to request the Company to redeem the Bonds, in whole or in part, on the third anniversary of the Issue Date at the Early Put Price.
The Early Put Price referred to above will be converted into NTD using the Fixed Exchange Rate, and then converted back to USD using the prevailing exchange rate (based on the Taipei Forex Inc. Taiwan Dollar 11:00 Fixing Rate) for payment in USD.
G. Redemption at the Option of the Company:
The Company may redeem the Bonds in accordance with the following conditions:
(a) The Company may, at its option, redeem the Bonds, in whole or in part, at an amount equal to 100% of their principal amount, plus a yield calculated semi-annually at the rate of 0.00% per annum on the days elapsed from the Issue Date to the date of the occurrence of any such event (on the basis of 360 days a year and 30 days a month) (the "Early Redemption Amount") if at any time after three years of the Issue Date, the closing price for 20 consecutive trading days (in the event of ex-rights or ex-dividends, the closing price on each applicable trading days during the period from the ex-rights or ex-dividends trading day to the ex-rights or ex-dividends record date, as the case may be, shall be adjusted to the price taking into account of impact of the ex-rights or ex-dividends) of the Company's common shares on the TWSE is at least 130% of the quotient of the Early Redemption Amount multiplied by the prevailing Conversion Price, divided by the principal amount of the Bonds; or
(b) The Company may, at its option, redeem the Bonds, in whole but not in part, at the Early Redemption Amount if more than 90% of the Bonds have been previously redeemed, repurchased and cancelled or converted; or
(c) The Company may, at its option, redeem the Bonds, in whole but not in part, at the Early Redemption Amount if there occur any changes in ROC taxation resulting in increase of tax obligation or the necessity to pay additional interest expense or increase of additional costs to the Company. Bondholders may elect not to have their Bonds redeemed but with no entitlement to any additional amount or reimbursement of additional tax.
The Early Redemption Amount referred to above will be converted into NTD using the Fixed Exchange Rate, and then converted back to USD using the prevailing exchange rate (based on the Taipei Forex Inc. Taiwan Dollar 11:00 Fixing Rate) for payment in USD.
(5) Trading Market: Singapore Stock Exchange
(6) Use of Proceeds and Estimated Benefits:
A. Use of Proceeds: Purchase of raw materials overseas
B. Estimated Benefits: Saving interest expense
(7) Impact to Shareholders: If all the Bonds were converted into Common Shares within this year, the share dilution effect will be around 0.54%. This dilution effect should have limited influence to existing shareholders rights.
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