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NEC Electronics Approved Issue of New Shares and Sale of Existing Shares
KAWASAKI, Japan, June 16, 2003 -
NEC Electronics Corporation (President: Kaoru Tosaka, Code no. 6723) today announced that the board of directors approved today that the Company make an initial public offering consisting of newly issued shares and existing shares sold by a selling shareholder immediately prior to the listing of its shares on the Tokyo Stock Exchange.
1. Offering of newly issued shares
(1) Number of shares to be issued
23,500,000 shares of common stock
9,900,000 shares are to be offered in Japan and 13,600,000 shares are to be offered outside Japan. However, the definitive number of shares to be offered in or outside Japan will be determined on July 14, 2003 taking into account the demand for the 23,500,000 shares.
(2) Issue price
Undecided (to be determined by the board of directors hereafter) However, if the purchase price (which is the amount to be paid by the underwriters to the Company) is less than the issue price, the issue of new shares will be cancelled.
(3) Portion of issue price which is not accounted as paid-in capital
Undecided (to be determined by the board of directors hereafter)
(4) Offering price
Undecided (to be determined on July 14, 2003 taking into account the market demand; marketing will be made at a price which is above the issue price)
(5) Offering method
Shares will be offered simultaneously in Japan and overseas.
(5-1) Japanese offering
All shares, which will be publicly offered, will be underwritten by the following underwriters: Daiwa Securities SMBC Co. Ltd.; Morgan Stanley Japan Limited; Nomura Securities Co., Ltd.; Nikko Citigroup Limited; Shinko Securities Co., Ltd.; Mizuho Securities Co., Ltd.; Mitsubishi Securities Co., Ltd.; Okasan Securities Co., Ltd.; SMBC Friend Securities Co., Ltd.; Matsui Securities Co., Ltd.; and E*TRADE Securities Co., LTD.
(5-2) International offering
Shares will be offered mainly to investors in the U.S. and Europe. However, sales in the U.S. will be restricted to qualified institutional buyers under Rule 144A of the U.S. Securities Act of 1933. All shares will be underwritten by the following underwriters: Morgan Stanley & Co. International Limited; Daiwa Securities SMBC Europe Limited; Deutsche Bank AG London; Goldman Sachs International; J.P. Morgan Securities Ltd.; Merrill Lynch International; Citigroup Global Markets Limited; and Nomura International plc.
However, the issue and offer of new shares will be cancelled if the sale by NEC Corporation of existing shares described in 2. below is cancelled.
(6) Payment handling bank
Sumitomo Mitsui Banking Corporation, Tokyo Main Office
(7) Commissions or fees to underwriters
In lieu of payment of an underwriting fee, the underwriters will receive the difference between the purchase price at which they purchase newly issued shares and the offering price at which they sell the shares to investors.
(8) Subscription period
July 15 (Tuesday) through July 18 (Friday), 2003
(9) Minimum subscription unit
100 shares
(10) Payment date
July 23, 2003 (Wednesday)
(11) Stock certificate delivery date
July 24, 2003 (Thursday)
(12) Date from which dividends accrue
April 1, 2003 (Tuesday)
(13) Other matters to be approved by the board of directors will be decided at meetings of the board of directors to be held hereafter.
(14) All above matters related to the Japanese offering are subject to the effect of the registration under the Japanese Securities Exchange Law.
2. Sale of existing shares
(1) Number of shares to be sold
a) 10,500,000 shares of common stock will be sold by NEC Corporation
b) Up to 3,000,000 shares of common stock may be sold as over-allotment in the Japanese offering
(2) Sales price
Undecided (to be determined on July 14, 2003)
The sales price (to be paid by investors) for existing shares will be the same as the offering price (to be paid by investors) for newly issued shares described in section 1. above.
(3) Seller and number of shares to be sold
a) 10,500,000 shares will be sold by NEC Corporation at 7-1, Shiba 5-chome, Minato-ku, Tokyo, Japan
b) Up to 3,000,000 shares will be sold as over-allotment by Daiwa Securities SMBC Co. Ltd. at 3-5, Yaesu 1-chome, Chuo-ku, Tokyo, Japan
The total number of shares of a) and b) above will be up to 13,500,000
(4) Selling method
a) 10,500,000 shares of common stock to be sold by NEC Corporation
All shares, which will be sold to the public, will be underwritten by the following underwriters: Daiwa Securities SMBC Co. Ltd.; Morgan Stanley Japan Limited; Nomura Securities Co., Ltd.; Nikko Citigroup Limited; Shinko Securities Co., Ltd.; Mizuho Securities Co., Ltd.; Mitsubishi Securities Co., Ltd.; Okasan Securities Co., Ltd.; SMBC Friend Securities Co., Ltd.; Matsui Securities Co., Ltd.; and E*TRADE Securities Co., LTD.
b) Up to 3,000,000 shares of common stock that may be sold as over-allotment
In connection with the offering by the Company of new shares and the sale by NEC Corporation of existing shares in Japan, Daiwa Securities SMBC Co. Ltd. will sell shares borrowed from NEC Corporation taking into account the market demand for such Japanese offering. All or part of the sale of shares for the purpose of over-allotment may not be made depending upon the market demand.
However, the sale of existing shares described in sections a) and b) will be cancelled if the issue of shares described in 1. above is cancelled.
(5) Subscription period
July 15 (Tuesday) through July 18 (Friday), 2003
(6) Minimum subscription unit
100 shares
(7) Stock certificate delivery date
July 24, 2003 (Thursday)
(8) Other matters to be approved by the board of directors will be decided at meetings of the board of directors to be held hereafter.
(9) All above matters are subject to the effect of the registration under the Japanese Securities Exchange Law.
***
(Appendix: Supplementary information)
1. Summary of public offering and sale of existing shares
(1) Number of shares to be issued or sold
Number of shares to be issued: 23,500,000 shares of common stock
(9,900,000 shares are to be offered in Japan and 13,600,000 shares are to be offered overseas, mainly in the U.S. and Europe. However, sales in the U.S. will be restricted to qualified institutional buyers under Rule 144A of the U.S. Securities Act of 1933. The final number of shares to be offered in Japan or overseas will be determined on July 14, 2003 taking into account the demand for the 23,500,000 shares. The total number of shares to be issued for this public offering may be revised by the board of directors at its meeting to be held on June 30, 2003.)
Number of existing shares to be sold: Up to 13,500,000 shares
a) 10,500,000 shares will be sold by NEC Corporation
b) Up to 3,000,000 shares may be sold as over-allotment*
(2) Demand reporting period
July 2 (Wednesday) through July 11 (Friday), 2003
(3) Price determination date
July 14, 2003 (Monday)
(The offering price (to be paid by investors for new shares) and sales price (to be paid by investors for existing shares) which shall be not less than the issue price will be determined taking into account the market demand.)
(4) Subscription period
July 15 (Tuesday) through July 18 (Friday), 2003
(5) Stock certificate delivery date
July 24, 2003 (Thursday)
(6) Date from which dividends accrue
April 1, 2003 (Tuesday)
Daiwa Securities SMBC Co. Ltd. and Morgan Stanley & Co. International Limited will act as joint global coordinators for the Japanese offering and the international offering.
* Information concerning the sale of existing shares for the purpose of the over-allotment:
The sale of shares for the purpose of the over-allotment will be conducted by Daiwa Securities SMBC Co. Ltd., which will sell up to 3,000,000 shares of NEC Electronics common stock borrowed from NEC Corporation. The shares will be sold in the Japanese offering under the same terms as the offering of newly issued shares and the existing shares described above. This sale will reflect market demand in Japan for the new and the existing shares. As the number of shares is an upper limit, the actual number of shares sold for the purpose of the over-allotment may be less than the upper limit, or none at all, depending on demand for NEC Electronics' shares.
In connection with the borrowing of the common stock from NEC Corporation as described above, Daiwa Securities SMBC Co. Ltd. will be given the option to purchase additional common stock of NEC Electronics from NEC Corporation at the same price as the purchase price at which they purchase the shares up to the number of shares offered for the purpose of the over-allotment (the "over-allotment option"). In the event that Daiwa Securities SMBC Co. Ltd. exercises this option, it is deemed that Daiwa Securities SMBC Co. Ltd. has returned the same number of common stock which were borrowed for the over-allotment sales described above to NEC Corporation by purchasing the shares from NEC Corporation.
Furthermore, Daiwa Securities SMBC Co. Ltd. may, between July 24 and August 15, 2003, purchase on the Tokyo Stock Exchange NEC Electronics shares ("syndicate coverage transactions") up to the maximum number of shares that can be sold for the purpose of the over-allotment for the purpose of returning the shares borrowed from NEC Corporation for the over-allotment sale.
In the event that Daiwa Securities SMBC Co. Ltd. conducts syndicate coverage transactions, Daiwa Securities SMBC Co. Ltd. will not exercise the over-allotment option for the number of shares acquired through the syndicate coverage transactions. Furthermore, during the syndicate coverage transaction period, Daiwa Securities SMBC Co. Ltd. may, at its discretion, decide to completely suspend syndicate coverage transactions or finish these transactions prior to reaching the maximum number of shares.
2. Total number of shares to be issued for the public offering
Current number of shares issued and outstanding: 100,000,000
Number of shares issued for public offering: 23,500,000
Number of shares after public offering: 123,500,000
3. Use of proceeds
Proceeds are to be used for investments in the fiscal year ending on March 31 2004 and subsequent years. This will include \82,000,000 thousand for production equipment for the purpose of enhancing our competitiveness and information systems and other equipment for improving efficiency. Remaining funds will be used for working capital and other requirements.
4. Distribution of earnings to shareholders
(1) Fundamental policy
The fundamental policy regarding the distribution of earnings is to adopt a comprehensive approach that reflects the need to maintain sufficient retained earnings to strengthen the financial position and support future growth as well as the need to return earnings to shareholders in accordance with operating results.
(2) Use of retained earnings
Retained earnings will be used to support future growth through investments that increase operating efficiency, raise manufacturing productivity and bring about other improvements that make the Company more competitive.
(3) Dividends over the past three years
The Company has not paid any dividend for the first fiscal term (from November 1, 2002 through March 31, 2003).
5. Sales of shares to employee stock ownership plan
The underwriters plan to sell a certain percentage of the Japanese public offering of 9,900,000 shares to the Company's employee stock ownership plan.
6. Sales policy
Sales may be made to investors not subscribing for shares, taking into account such factors as the need to satisfy stock exchange listing standards pertaining to the number of shareholders and the liquidity of shares after listing.
Regarding sales to investors that subscribe for shares, the underwriters will, in principle, choose from investors who have subscribed at or above the issue price, taking into consideration investors' degrees of involvement in the subscription, as well as their experience, knowledge, investment policies and other matters connected with equity investments. Decisions will be made in accordance with each underwriter's internal regulations governing such sales.
Regarding sales to investors that have not subscribed for shares, the underwriters will, in principle, choose investors, taking into account their experience, knowledge, investment policies, past transactions with the underwriters and other matters connected with equity investments. Decisions will be made in accordance with each underwriter's internal regulations governing such sales.
***
This press release does not represent a solicitation to purchase securities in the U.S. issued by the company. The solicitation and sale of securities issued by the company are not permitted in the U.S., other than in cases where the securities have been registered under the U.S. Securities Act of 1933 or have been exempted from the registration requirement. An English-language prospectus will be prepared in cases where securities are to be offered in the U.S. The prospectus will contain detailed information on the issuing company and its management team, as well as financial statements. NEC Electronics has no intention of registering these securities for sale in the U.S.
Information in the press releases, including product prices and
specifications is current on the date of the press announcement,
but is subject to change without prior notice.
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