Last checked at 6 Aug 2015 12:03
Subject: Modification of the 2014 Utilization Plan of Funds Obtained Through the Sale of New Stocks
Date of events: 2015/08/06
Contents:
1. Date of the board of directors resolution for the change: 2015/08/06
2. Dates of effective registration of the original plan: 2014/10/21
3. Reason for the change:
Redemption repayment from the put option executed by the ECB holders in the original plan was implemented in Q2 2015. Due to the costs is lower than the redemption repayment from the put option, Acer had been continually purchasing back and cancelling the convertible bond from the market. The current amount of the convertible bond has been lessened from USD103, 800,000 to USD13, 400,000. Therefore, as of the expiration date of the options (July 27, 2015), only NT $459,815 thousand of the convertible bonds had been sold back by the bondholders, and NT $ 1,340,185 thousand of the increased capital remain unspent. For the effective use of the funds, it is proposed to change the purpose of the funds from "redemption repayment from the put option executed by the ECB holders" to "strengthening working capital", which will be able to effectively save interest of short-term bank financing expenditure and reduce financial burden.
4. Content of each and every successive past changed plan for raising of funds before and after change:
Before changing:
(1) Pay off bank loan: NTD 3.6 billion.
(2) Redemption repayment from the put option executed by the ECB holders: NTD3.516 billion.
After changing:
(1) Pay off bank loan: NTD 3.6 billion.
(2) Redemption repayment from the put option executed by the ECB holders: NTD 460 million
(3) Strengthening working capital: 1.34 billion
5. Anticipated timetable for execution:
(1) Pay off bank loan: Q2 and Q4 of 2015
(2) Redemption repayment from the put option executed by the ECB holders: Q3 2015
(3) Strengthening working capital: Q3 2015
6. Anticipated completion date:
(1) Pay off bank loan: Q2 and Q4 of 2015
(2) Redemption repayment from the put option executed by the ECB holders: Q3 2015
(3) Strengthening working capital: Q3 2015
7. Anticipated possible benefits:
(1) Pay off bank loan: based on assumed interest rate, it is expected that NTD 21 million could be saved in 2015, and NTD 72 million could be saved in the following years.
(2) Redemption repayment from the put option executed by the ECB holders: based on our current average interest rate which is 2%, it is expected that NTD 3.065 million could be saved in 2015, and NTD 9.196 million could be saved in the following years.
(3) Strengthening working capital: based on our current average interest rate which is 2%, it is expected that NTD 8.935 million could be saved in 2015, and NTD 26.804 million could be save d in the following years.
8. Difference with original anticipated benefits:
(1) Redemption repayment from the put option executed by the ECB holders: NTD 61.122 million could be saved by the new plan every year.
(2) Pay off bank loan: No difference
(3)Strengthening working capital: NTD 26.804 million could be save by the new plan every year.
9. Effect of the current change on shareholder equity:
As a response to changes in the financial planning, ACER reserves to maintain a stable banking facilities and working capital. The proposed modification will increase flexibility and scheduling the use of funds and improve the financial structure in the long run, there is no significant negative impact on shareholders' interests.
10. Abstract of the original lead underwriter's appraisal opinion:
The main reason for the Company to modify the plan is because the ECB holders did not sell back their bonds because of the economic fluctuation. In order to manage the capital more efficiently and lower the cost, the modifications of the original plan is necessary and reasonable.
11. Any other matters that need to be specified: N/A