• Font Size:
  • S
  • M
  • L
友善列印
WORD

Article NO. Content

Title:

Directions for Public Companies Conducting Private Placements of Securities  CH

Amended Date: 2014.12.30 
4     For a private placement of securities by a public company under Article 43-6 of the Act, with the exception of straight corporate bonds (which may be resolved on by the board of directors under paragraph 3 of the same article), the below-listed particulars shall be stated in the notice to convene the shareholders' meeting in accordance with paragraph 6 of that article, and shall be thoroughly explained at the shareholders' meeting:
  1. The basis and reasonableness of the private placement pricing:
    1. For a private placement of common shares, specify the percentage by which the private placement price of common shares may not be lower than the reference price, and the basis for the method by which the price was set, and its reasonableness; if the placee intends to make a non-cash capital contribution, the meeting notice shall also specify the capital contribution method, amount offset by the non-cash contribution and its reasonableness, and an independent expert's opinions on the reasonableness of the offset amount, to serve as a reference for the shareholders to decide whether to agree.
    2. For a private placement of securities with equity characteristics such as preferred shares, convertible corporate bonds or corporate bonds with warrants, specify the terms of the private placement, the percentage by which the issuance price may not be lower than the theoretical price, and provide an overall explanation of the reasonableness of the terms set for the private placement. For a private placement of preferred shares, if the placee intends to make a non-cash capital contribution, the meeting notice shall also specify the capital contribution method, amount offset by the non-cash contribution and its reasonableness, and an independent expert's opinions on the reasonableness of the offset amount, to serve as a reference for the shareholders to decide whether to agree.
    3. If the price per share of the privately placed common shares or preferred shares, the conversion price of convertible corporate bonds, or the subscription price of preferred shares with warrants, corporate bonds with warrants, or employee stock warrants might possibly be lower than the par value of the shares, specify the cause, reasonableness, method of price setting, and any effect on the shareholders' equity (such as an increase in accumulated loss, or the possibility of future capital reduction as a result of an increase in accumulated loss).
    4. Where the company is a TWSE listed or GTSM listed company or an emerging stock company, if the price per share of the privately placed common shares is lower than 80 percent of the reference price, or if the issuance price of the preferred shares, convertible corporate bonds, preferred shares with warrants, corporate bonds with warrants, or employee stock warrants is lower than 80 percent of the theoretical price, state the independent expert's opinion on the basis and reasonableness of the pricing on the meeting notice, to serve as a reference for the shareholders to decide whether to agree.
    5. The shareholders' meeting may not grant discretionary authorization to the board of directors or the chairman of the board to set the percentage for the private placement pricing.
  2. The method for selecting the specific persons:
    1. If the placees are insiders or related parties of the company, the list of placees, method and objectives of selecting the placees, and the relationship between the placees and the company shall be fully discussed at a meeting of the board of directors and stated in the notice to convene the shareholders' meeting, failing which no such person may subscribe afterwards. The price per share fixed for privately placed common shares may not be lower than 80 percent of the reference price, and the issuance price fixed for privately placed preferred shares, convertible corporate bonds, preferred shares with warrants, corporate bonds with warrants, or employee stock warrants may not be lower than 80 percent of the theoretical price.
    2. If any placee is a strategic investor, the method and objectives of selecting the placee, the necessity for that selection, and the anticipated benefits shall be fully discussed at a meeting of the board of directors and stated in the notice to convene the shareholders' meeting.
    3. Where the placees have already been determined before the shareholders' meeting notice is mailed, the method and objectives of selecting the placees, and the relationship between the placees and the company, shall be specified. If any placee is a juristic person, the name of the juristic person and the name and the percentage of shareholdings shall be given of every shareholder of the juristic person whose equity interest ranks among the top 10, and also of the relationship to the company of every shareholder of the juristic person whose equity interest ranks among the top 10.
    4. Where the placees are determined after the shareholders' meeting notice is mailed, the above information on the placees shall be input into the Market Observation Post System ("MOPS") within 2 days starting from the date the placees are determined.
  3. In the reasons for the necessity for conducting the private placement, specify the reasons for not using a public offering, the limit on the private placement, the use of the funds raised by the private placement, and the anticipated benefits. If there are to be multiple closings, also specify the anticipated number of closings, the use of the funds for each closing of the private placement, and the anticipated benefits for each closing.
    If an independent director expresses an objection or reservation, it shall be specified in the notice to convene the shareholders' meeting.
    If there is a significant change in managerial control within the 1 year period immediately preceding the day on which the board of directors resolves on the private placement, or if there will be a significant change in managerial control after the introduction of strategic investor through private placement, the company shall engage a securities underwriter to provide an assessment opinion on the necessity and reasonableness for conducting the private placement, and shall state the opinion in the notice to convene the shareholders' meeting to serve as a reference for the shareholders to decide whether to agree.
    The required information under the preceding three paragraphs shall appear in the notice to convene the shareholders' meeting in a conspicuous typeface, accompanied by an indication of the websites where relevant information may be found, including the website of the MOPS and the company's website.