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A public company with a net profit and no accumulated deficit for the most recent fiscal year shall use the public offering method to issue securities, except in any of the following circumstances in which a private placement may be conducted:
- The company is a public company formed by one single government or juristic-person shareholder.
- The capital raised through private placement is to be used entirely in the introduction of a strategic investor(s).
- The company is an TWSE listed, TPEx listed, or emerging-stock company to which a circumstance is likely to occur under Article 7 or 8 of the Regulations Governing the Offering and Issuance of Securities by Securities Issuers, where for justifiable reason the company, in urgent need of capital, is unable to achieve the reasonable improvement of the situation necessary for a public offering to be conducted, and has been granted approval by the Taiwan Stock Exchange Corporation ("TWSE") or Taipei Exchange ("TPEx"). Nevertheless, in no event may a placee under the private placement be an insider or related party of the company.
A company conducting a private placement shall collect the price of the shares or subscription in full within 15 days starting from the day on which the board of directors resolves on the price determination date. However, if the private placement additionally requires an approval from the FSC or another competent authority, the company shall collect the price of the shares or subscription in full within 15 days from the date it receives the approval of the FSC or the other competent authority.
When a TWSE (or TPEx) primary listed company or a foreign emerging stock company conducts a private placement of corporate bonds, it shall obtain an approval letter from the Central Bank in advance, and shall submit filings to the Central Bank in accordance with Point 5, paragraph 3.
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A public company shall report to the subsequent shareholders' meeting or meetings and specify the dates of the approvals by the shareholders' meeting and the board of directors for the conducting of a private placement of straight corporate bonds (including exchangeable corporate bonds) or securities with equity characteristics and the quantity approved, the basis and reasonableness of the private placement price, the method for selecting the specific persons, the reasons for the necessity of conducting the private placement, the placees of the private placement, qualification requirements, subscription quantities, relationship to the company, involvement in company operations, actual subscription (or issuance) price, the discrepancy between the actual subscription (or issuance) price and the reference (or theoretical) price, any effect of the private placement on shareholder equity, and the status of utilization of the funds, plan implementation progress, and the realization of plan benefits from the time the price of the shares or subscription has been paid up in full until the fund utilization plan has been completely carried out.
When a public company conducts a private placement in Taiwan of corporate bonds denominated in a foreign currency, it shall obtain an approval letter from the Central Bank in advance, unless the funds raised by the private placement are to be retained in the original currency or the entire amount converted into New Taiwan Dollars via an FX swap or cross currency swap (CCS) for use.
The collection and return of funds raised by a private placement of corporate bonds under the preceding paragraph and the payment of interest and principal shall be made in the currency in which the corporate bonds are denominated, and the payments shall be made by foreign exchange deposit account transfer. When there is any change in the corporate bond private placement balance, the company shall file with the Central Bank a Statement of Changes in the Outstanding Balance of Privately Placed Foreign Currency Denominated Corporate Bonds by the 20th day of each month for the data as of the 15th of that month and by the 5th day of each month for the data as of the end of the previous month respectively.
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