Chinese chipmaker SMIC to raise $ 6.55 billion in Shanghai share sale

BEIJING (Reuters) – China’s Semiconductor Manufacturing International Corp (SMIC) (0981.HK) Will Raise 46.29 Billion Yuan ($ 6.55 Billion) In A Shanghai Stock Sale, More Than Double Its Initial Target, Pricing Its Offering After An Increase In Its Hong Kong Listed Stocks .

The company, which had originally tried to raise around 20 billion yuan, set the sale price of its shares to be traded in Shanghai at 27.46 yuan each, it said in a presentation to the Shanghai Stock Exchange on Sunday.

The offering values ​​the company at 109.25 times its 2019 earnings, based on the expanded share base, according to the filing. In comparison, rival Taiwan Semiconductor Manufacturing Co Ltd (TSMC) (2330.TW) has a final price-earnings ratio of 21,315.

SMIC’s fundraising comes as the Shanghai-based company increases its war chest amid broader tech-related tensions between the United States and China, and will be used to finance projects and replenish operating capital.

Established in 2000, SMIC is the main semiconductor foundry in mainland China and competes with Taiwan-based TSMC with the latest technology.

Hong Kong-listed SMIC shares rose more than 5% on Friday to HK $ 33.25, and have risen 172.5% since the end of March.

The insurer of the deal, Haitong Securities, has the option to expand the size of the IPO by 15%, which means that SMIC can raise up to 53.23 billion yuan.

The institutional part of the deal was signed nearly 165 times, the company said.

Two large sovereign wealth funds, the GIC Private Limited of Singapore and the Abu Dhabi Investment Authority, signed up as strategic investors for shares worth 3 billion yuan and 400 million yuan, respectively, SMIC said.

The China National Integrated Circuit Industry Investment Fund, popularly known as “the big fund,” is investing 3.5 billion yuan in the company, SMIC said.

SMIC’s online subscription, aimed primarily at individual investors, will begin Tuesday, he said.

Reports by Min Zhang and Tony Munroe in Beijing and Samuel Shen in Shanghai; Editing by William Mallard

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