Bharat FIH Limited (BFIH), the India unit of Foxconn, ( the Taiwanese electronics manufacturer and a major supplier to Apple Inc) has filed the Draft Red Herring Prospectus (DRHP) with SEBI, BSE and NSE for its initial public offer of up to Rs 5,000 crore.
The proposed offer will include the sale of new equity shares to be issued by BFIH of up to Rs 2,500 crore and an offer for the sale of existing equity shares of up to Rs 2,500 crore by the Foxconn group (through its subsidiary, Wonderful Stars Pte Ltd), with both of them aggregating up to 25 per cent of the total issued share capital of BFIH immediately upon completion of the proposed spinoff.
The spinoff is planned to establish its own identity as a separately listed group with a separate fund-raising platform and direct and independent access to both equity and debt capital markets to finance its existing operations and future expansion, the company stated in its DRHP.
BFIH, an electronics manufacturing services company, is the largest EMS provider in India dominating with a 27 per cent market share, the company stated in its DRHP.
The company offers end-to-end components and manufacturing and engineering services to its customers in respect of handsets, other wireless communication devices and consumer electronic products.
It also provides innovative product development and design, casings components, PCBA (Printed Circuit Board Assembly), full-system assembly, etc, and supply chain services and solutions, and repair and other after-sales services that are located close to the customers.
The company intends to use the net proceeds from the sale of existing equity shares pursuant to pay a special cash dividend to the shareholders and to finance its working capital requirements, maintain a healthy capital structure, mitigate the exposures of unforeseen market risks, and for the company’s capital commitments and other investments for future business growth and development when opportunities arise, the DRHP stated.
No less than 40 per cent of the net proceeds will be used to pay a special cash dividend to the shareholders.
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