Datang Telecom to hit 100 million U.S. dollars overweight SMIC

As the two strategic investors introduced by SMIC, both Datang Telecom and TSMC have a preemptive right to share shares in the company.　　But not the same "entry mode", so that the two strategic investors in the core of the international issue of new shares in a different response. July 8, SMIC International Disclosure Company proposed to issue new shares, will be through the placement agent to not less than 6 independent contractors to allocate up to 1.5 billion shares per share price of HK $0.52.　　If all 1.5 billion shares are successfully allocated, the total amount will be HK $780 million, after deducting the related expenses, about HK $755 million, the company said the funds raised will be used to expand the company's capacity. Earlier in the day, that is, July 7, Datang Telecom has declared its intention to exercise preemptive rights to subscribe to the stake, in order to prevent the proportion of the shareholding is diluted. In addition to the priority subscription, Datang Telecom also intends to subscribe for additional shares, the total value estimated at about 100 million U.S. dollars. The July 8 announcement also said that if the placement of 1.5 billion shares, Datang Telecom's preferred shares will be about 269.7 million shares, and the additional shares of about 1.228 billion shares.　　After the placing and subscription is completed, Datang Telecom's shareholding will rise from the current 15.24% to 19.06%. Consulting SMIC's announcement of November 10, 2008, Datang Telecom then agreed to subscribe for about 3.699 billion shares of SMIC at a subscription price of HK $0.36 per share through a subsidiary company incorporated in Hong Kong, representing about $171.8 million in the company's 15.24% stake. The subscription was completed on December 24, 2008.　　In return, Datang Telecom has a thinly-diluted preemptive option in the case of SMIC's proposed IPO, but the stock lock is 2 years in a regular period. Today, Datang Telecom has expressed hopes that the restricted stocks will be lifted in advance.　　Smic agrees, but the premise is that Datang Telecom must complete the exercise of priority subscription rights and subscription of additional shares, Datang Telecom said that it is acceptable. For TSMC, the IPO of SMIC seems less positive. That year SMIC and TSMC for 7 years of patent lawsuit so that TSMC passive investment in SMIC, although received 200 million U.S. dollars of reparations, but the relationship between the two seems always separated by a layer of window paper. Smic said the company had given notice to TSMC that it would be deemed to give up preemptive rights if TSMC did not respond within 10 business days of the notification. As a result, TSMC should not aggressively subscribe to new shares, as Datang Telecom does.