Gigabyte to issue at least USD 200m-USD 300m CB

Breaking News 6 June

Gigabyte to issue at least USD 200m-USD 300m CB

Gigabyte Technology Co [TPE:2376], a computer motherboard and peripherals maker, plans to issue at least USD 200m-USD 300m worth of overseas convertible bonds, according to two sources familiar with the situation.

UBS has been appointed to run the deal, the first source said, adding the bank is the sole deal manager for now.

The deal size could be larger, considering the company’s market capitalization of TWD 132bn (USD 4.3bn), both sources said.

While the final deal size in USD terms is unclear, the intention is to keep dilution at around 5% should the entire offer be converted into shares eventually, the second source said.

The second source also noted that Gigabyte’s board has had preliminary discussions about the deal, while the first source added that board approval is expected before long.

Two local asset swap participants said they have been approached for the deal, though they have not decided whether to participate in it.

The deal, the company’s third overseas CB offer, comes as Gigabyte’s share price hits record highs. The stock traded nearly 1% lower at TWD 209.50 per share early afternoon on Tuesday (6 June) in Taipei.

The company raised USD 115m from a CB issuance in 2001, followed by another USD 100m offer in 2006, according to Dealogic data.

The Taiwanese company plans to use the proceeds from the upcoming CB offer to deepen its collaborations with Nvidia [NASDAQ:NVDA] in the areas of graphic processing unit (GPU) AI applications, according to the second source.

Such applications will target mega clients from Google, Meta to Amazon, the same source said.

For the first quarter ended 31 March, Gigabyte reported diluted earnings per share of TWD 1.59, down from TWD 4.73 a year earlier, while revenue dropped to TWD 28.03bn from TWD 32.61bn, according to its financial statement posted on the Taiwan Stock Exchange.

Its cash and cash equivalents amounted TWD 16.9bn at the end of the first quarter, growing from TWD 13.4bn a year earlier, according to its balance sheet, which shows that the company carried no short- or long-term debt on 31 March.

Gigabyte declined to comment when called and hasn't responded to an email from this news service seeking comment. UBS declined to comment.