SMIC Proposed Issue of US$200 Million Zero Coupon Convertible Bonds

News provided by

Nov 18, 2019, 19:53 ET

SHANGHAI, Nov. 18, 2019 /PRNewswire/ --

Semiconductor Manufacturing International Corporation ("SMIC", the "Company"; SEHK: 981; OTCQX: SMICY)

(1) PROPOSED ISSUE OF US$200 MILLION ZERO COUPON CONVERTIBLE BONDS DUE 2022 TO BE CONSOLIDATED AND FORM A SINGLE SERIES WITH THE EXISTING US$450 MILLION ZERO COUPON CONVERTIBLE BONDS DUE 2022

(2) PRE-EMPTIVE RIGHT OF DATANG

(3) PRE-EMPTIVE RIGHT OF CHINA IC FUND

ISSUE OF THE PLACED BONDS

On 18 November 2019, the Company and the Manager entered into the Placed Bonds Subscription Agreement, pursuant to which the Manager has agreed to subscribe and pay for, or to procure subscribers to subscribe and pay for the Placed Bonds to be issued by the Company in an aggregate principal amount of US$200 million which will be consolidated and form a single series with the Existing Bonds. The Placed Bonds are issued at a substantial premium resulting in gross proceeds of US$232 million.

Based on the Effective Conversion Price of HK$10.73 per Share as at the date of the Placed Bonds Subscription Agreement and assuming full conversion of the Placed Bonds at such Effective Conversion Price, the Placed Bonds will be convertible into approximately 167,950,270 Placed Conversion Shares, representing (i) approximately 3.32% of the issued share capital of the Company on the Last Trading Day and (ii) approximately 3.22% of the issued share capital of the Company as enlarged assuming the full conversion of the Placed Bonds at the Effective Conversion Price as at the date of the Placed Bonds Subscription Agreement (assuming that there is no change in the issued share capital of the Company, save for the issue of the Placed Conversion Shares).

The Placed Conversion Shares will be allotted and issued pursuant to the General Mandate and will rank pari passu in all respects with the Shares then in issue on the relevant conversion date. The issue of the Placed Bonds is not subject to the approval of the Shareholders.

An application will be made to the Stock Exchange for the listing of, and permission to deal in, the Placed Conversion Shares. An application will be made to the Singapore Exchange for the listing and quotation of the Placed Bonds.

Completion of the Placed Bonds Subscription Agreement is subject to the satisfaction or waiver of the conditions precedent in the Placed Bonds Subscription Agreement. In addition, the Placed Bonds Subscription Agreement may be terminated in certain circumstances. Please refer to the section headed "The Placed Bonds Subscription Agreement" below for further information.

PRE-EMPTIVE RIGHT OF DATANG

Reference is made to the Company's announcements dated 10 November 2008 in relation to the Datang Purchase Agreement.

Pursuant to the Datang Purchase Agreement, in case of any issue of new Shares or securities convertible into Shares, subject to certain exceptions, Datang has a pre-emptive right to subscribe for (i) a pro rata portion of such new securities being issued equivalent to the percentage of the issued share capital of the Company then owned by Datang immediately prior to the issue of such securities; or (ii) should such issue of new Shares or securities convertible into Shares result in a single investor or investor group acting in concert beneficially owning more Shares than Datang and its wholly-owned subsidiary, one Share more than the number of Shares proposed to be beneficially owned by such prospective largest shareholder of the Company. Datang's pre-emptive right is applicable to the issue of the Placed Bonds and any China IC Fund Pre-emptive Subscription. Pursuant to the Datang Purchase Agreement and the Listing Rules, completion of any such issue of the Datang Pre-emptive Bonds to, and subscription of the Datang Pre-emptive Bonds by, Datang upon exercise of its pre-emptive right will be further subject to the receipt of any required regulatory approvals and the approval of the independent Shareholders.

Any exercise by Datang of its pre-emptive right to subscribe for the Datang Pre-emptive Bonds in connection with the issue of the Placed Bonds and any China IC Pre-emptive Subscription will be at a price equivalent to the issue price of the Placed Bonds.

The Company has notified Datang in accordance with the terms of the Datang Purchase Agreement in respect of the issue of the Placed Bonds and the possible China IC Fund Pre-emptive Subscription. Pursuant to the Datang Purchase Agreement, Datang is deemed to have elected not to exercise its pre-emptive right if it does not respond to the notice within ten (10) business days following the date of the notice.

As at the date of this announcement, Datang has indicated to the Company that it does not intend to exercise its pre-emptive right in relation to the issue of the Placed Bonds and the China IC Fund Pre-emptive Subscription.

PRE-EMPTIVE RIGHT OF CHINA IC FUND

Reference is made to the Company's announcement dated 12 February 2015 in relation to the China IC Fund Purchase Agreement.

Pursuant to the China IC Fund Purchase Agreement, in case of any issue of new Shares or securities convertible into Shares, subject to certain exceptions, China IC Fund has a pre-emptive right to subscribe for a pro rata portion of such new securities being issued equivalent to the percentage of the issued share capital of the Company then owned by China IC Fund immediately prior to the issue of such securities. China IC Fund's pre-emptive right is applicable to the issue of the Placed Bonds and the Datang Pre-emptive Subscription. Pursuant to the China IC Fund Purchase Agreement, completion of any such issue of the China IC Fund Pre-emptive Bonds to, and subscription of the China IC Fund Pre-emptive Bonds by, China IC Fund upon exercise of its pre-emptive right will be further subject to the receipt of any required regulatory approvals and the approval of the independent Shareholders.

Any exercise by China IC Fund of its pre-emptive right to subscribe for the China IC Fund Pre-emptive Bonds in connection with the issue of the Placed Bonds and any Datang Pre-emptive Subscription will be at a price equivalent to the issue price of the Placed Bonds.

The Company has notified China IC Fund in accordance with the terms of the China IC Fund Purchase Agreement in respect of the issue of the Placed Bonds and the possible Datang Pre-emptive Subscription. Pursuant to the China IC Fund Purchase Agreement, China IC Fund is deemed to have elected not to exercise its pre-emptive right with respect to the China IC Fund Pre-emptive Bonds if it does not respond to the notice within ten (10) business days following the date of the notice.

As at the date of this announcement, China IC Fund has indicated to the Company that it does not intend to exercise its pre-emptive right in relation to the issue of the Placed Bonds and the Datang Pre-emptive Subscription.

USE OF PROCEEDS

The gross proceeds from the issue of the Placed Bonds will be approximately US$232 million. The Placed Bonds have been issued at a substantial premium.

The net proceeds (net of fees, commissions and expenses) from the issue of the Placed Bonds will be approximately US$229.5 million. The net issue price per Placed Conversion Share is estimated to be approximately HK$10.61.

The Company intends to use the net proceeds (net of fees, commissions and expenses) from the issue of the Placed Bonds for the Company's capital expenditure for capacity expansion and other general corporate purposes.

Shareholders and potential investors should note that the completion of the issue of the Placed Bonds are subject to the fulfilment of the conditions under the Placed Bonds Subscription Agreement. As the issue of the Placed Bonds may or may not proceed, Shareholders and potential investors are reminded to exercise caution when dealing in the Shares.

For the full details of this announcement please see the filing: http://asia.blob.euroland.com/press-releases-attachments/1175934/HKEX-EPS_20191119_9071149-0.PDF

About SMIC

Semiconductor Manufacturing International Corporation ("SMIC"; SEHK: 981; OTCQX: SMICY), one of the leading foundries in the world, is Mainland China's most advanced and largest foundry, broadest in technology coverage, and most comprehensive in semiconductor manufacturing services. SMIC provides integrated circuit (IC) foundry and technology services on process nodes from 0.35 micron to 14 nanometer. Headquartered in Shanghai, China, SMIC has an international manufacturing and service base. In China, SMIC has a 300mm wafer fabrication facility (fab), a 200mm fab and a majority-owned joint-venture 300mm fab for advanced nodes (under construction) in Shanghai; a 300mm fab and a majority-owned 300mm fab for advanced nodes in Beijing; 200mm fabs in Tianjin and Shenzhen; and a majority-owned joint-venture 300mm bumping facility in Jiangyin. SMIC also has marketing and customer service offices in the U.S., Europe, Japan, and Taiwan China, and a representative office in Hong Kong China.

For more information, please visit www.smics.com.

Forward-Looking Statements

This press release contains, in addition to historical information, forward-looking statements. These forward-looking statements are based on SMIC's current assumptions, expectations, beliefs, plans, objectives, and projections about future events or performance. SMIC uses words like "believe," "anticipate," "intend," "estimate," "expect," "project," "target, "going forward", "continue", "ought to", "may", "seek", "should", "plan", "could", "vision", "goals", "aim", "aspire", "objective", "schedules", "outlook" and similar expressions to identify forward looking statements, although not all forward-looking statements contain these words. These forward-looking statements are necessary estimates reflecting judgment of SMIC's senior management and involve significant risks, both known and unknown, uncertainties and other factors that may cause SMIC's actual performance, financial condition or results of operations to be materially different from those suggested by the forward-looking statements including, among others, risks associated with cyclicality and market conditions in the semiconductor industry, intense competition in the semiconductor industry, SMIC's reliance on a small number of customers, timely wafer acceptance by SMIC's customers, timely introduction of new technologies, SMIC's ability to ramp new products into volume, supply and demand for semiconductor foundry services, industry overcapacity, shortages in equipment, components and raw materials, availability of manufacturing capacity, financial stability in end markets, orders or judgments from pending litigation, intensive intellectual property litigation in the semiconductor industry, general economic conditions and fluctuations in currency exchange rates.

In addition to the information contained in this press release, you should also consider the information contained in our other filings with The Hong Kong Stock Exchange Limited ("SEHK") from time to time. Other unknown or unpredictable factors also could have material adverse effects on our future results, performance or achievements. In light of these risks, uncertainties, assumptions and factors, the forward-looking events discussed in this press release may not occur. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date stated or, if no date is stated, as of the date of this press release. Except as required by applicable laws, SMIC undertakes no obligation and does not intend to update any forward-looking statement to reflect events or circumstances after the date on which such statement is made or to reflect the occurrence of unanticipated events after the date on which such statement is made or to reflect the occurrence of unanticipated events, whether as a result of new information, future events or otherwise.

CONTACT:

Investor Relations
+86-21-2081-2804
[email protected]

SOURCE SMIC