HG Semiconductor has announced the placement of 30 million new shares at the price of HK$3.20 (41 US cents) per share to no less than six places and has entered into an investment agreement with strategic investor Profit Act, an entity wholly-owned by Zhu Gongshan, GCL Technology Holdings’ founder, chairman and executive director, that will see HG Semiconductor issue 60 million subscription shares and 60 million warrants to Profit Act.

As at August 5 2022, HG Semiconductor has 563,591,000 shares in issue. According to the placing agreement, the shares represent approximately 5.32% of the company’s existing issued share capital. After deducting the placing commission and other relevant expenses, the maximum net proceeds will amount to approximately HK$93.6 million.

HG Semiconductor intends to use approximately HK$78 million of the proceeds for the strengthening of its research and development (R&D) capabilities – for example, in areas involving light-emitting diode (LED), mini-LED, fast-charging and gallium-nitride (GaN) devices and related products – which includes the setting up of R&D centres, recruitment of R&D professionals, and the procurement of equipment and materials with the aim of developing and capturing patents and technology.

The remains of the net proceeds will be used for provision of general working capital and improving the financial position of the company.

The agreement with Profit Act sets the subscription price at HK$3.00 per share and HK$3.68 per warrant share upon exercise of the warrants. After deduction of relevant costs and expenses, the gross and net proceeds from the share subscription and full exercising of the subscription rights attached to the warrants will be approximately HK$180 million and approximately HK$220.8 million respectively.

HG Semiconductor will use the proceeds from the share and warrant subscriptions for the development of its GaN business.

Looking ahead, the company will continue to pursue technological innovation and refine its business strategies to capture market opportunities and accelerate growth.