SMIC IPO funds not enough for capex?

February 26, 2006 – Just more than half of the funds raised in the initial public offering of China’s Semiconductor Manufacturing International Corp. (SMIC) will go to the company — the rest will be squirreled away by directors and institutional shareholders, according to the South China Morning Post.

SMIC is faced with a $3.32 billion plan over the next two years for capacity expansion, but its haul from the IPO would only be about $847 million, which would require the company to pursue more fundraising efforts.

Among the insiders looking to cash in — in part due to the potential sale of an extra 681 million shares for overallotments — are Motorola, Goldman Sachs, the Government of Singapore Investment Corp. and Citicorp International Finance, and all but one of SMIC’s 18 directors and executive officers. (The one person reportedly not looking to cash in: founder and CEO Richard Chang.)


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