Acer 2010 Annual Report Download - page 55

ACER INCORPORATED 2010 ANNUAL REPORT
106
FINANCIAL STANDING
107
A. At any time on or after August 10, 2013 and prior to the maturity date, the closing price
(translated into US dollars at the prevailing rate) of its common shares on the Taiwan Stock
Exchange is at least 130% of the 2015 Early Redemption Amount for 20 consecutive trading
days.
B. If more than 90% of 2015 Bond has been redeemed, repurchased and cancelled, or converted;
C. The change in the tax regulations of ROC causes the Company become obliged to pay
additional amounts in respect of taxes or expenses.
viii Redemption at maturity
Unless previously redeemed, repurchased and cancelled, or converted, the Company shall redeem
the 2015 Bonds at a redemption price of their principal amount plus a gross yield of 0.43% per
annum (calculated on a semi-annual basis) on August 10, 2015.
(b) The 2017 Bonds
i. Par value US$200,000
ii. Issue date August 10, 2010
iii. Maturity date August 10, 2017
iv. Coupon rate 0%
v. Conversion
Bondholders may convert bonds into the Company’s common shares at any time starting the 41th
day from the issue date until 10 days prior to the maturity date. The conversion price will initially
be NT$113.96 per common share, with a fixed exchange rate of NT$31.83 = US$ 1.00, subject
to adjustment by the formula provided in the issue terms if the Company’s outstanding common
shares are increased
vi Redemption at the option of the bondholders
A. Bondholders shall have the right, at such holder’s option, to require the Company to redeem, in
whole or in part, the 2017 Bonds held by such holder at a redemption price of 113.227% of their
principal amount in US dollars on August 10, 2015.
B. In the event that the Company’s common shares are officially delisted from the Taiwan
Securities Exchange, each bondholder shall have the right, at such holder’s option, to require the
Company to redeem the 2017 Bonds, in whole or in part, at 2017 Early Redemption Amount.
The 2017 Early Redemption Amount represents an amount equal to 100% of the principal
amount of the 2017 Bonds plus a gross yield of 2.5% per annum (calculated on a semi-annual
basis) at the relevant date.
C. If a change of control (as dened in the issue terms) occurs, each bondholder shall have the
right, at such holder’s option, to require the Company to redeem the 2017 Bonds, in whole or in
part, at 2017 Early Redemption Amount.
vii. Redemption at the option of the Company
The Company shall redeem the 2017 Bonds, in whole or in part, at the 2017 Early Redemption
Amount, in the following cases:
A. At any time on or after August 10, 2013 and prior to the maturity date, the closing price
(translated into US dollars at the prevailing rate) of its common shares on the Taiwan Stock
Exchange is at least 130% of the 2017 Early Redemption Amount for 20 consecutive trading
days.
B. If more than 90% of 2017 Bond has been redeemed, repurchased and cancelled, or converted;
C. The change in the tax regulations of ROC causes the Company become obliged to pay
additional amounts in respect of taxes or expenses.
viii. Redemption Amount at Maturity
Unless previously redeemed, repurchased and cancelled, or converted, the Company shall redeem
the 2017 Bonds at a redemption price of their principal amount plus a gross yield of 2.5% per
annum (calculated on a semi-annual basis) on August 10, 2017.
As of December 31, 2010, the liability and equity components of the aforementioned convertible bonds
were as follows:
NT$
Proceeds of issuance $ 15,950,000
Transaction cost (84,212)
Net proceeds of issuance 15,865,788
Amortization of bonds payable discount and transaction cost (recognized as interest expense) 171,597
Unrealized exchange gain on bonds payable (1,239,955)
Evaluation gain on redemption options of the convertible bonds (59,525)
Recognized as capital surplus－conversion right (295,494)
Recognized as nancial liabilities at fair value through prot and
loss (redemption options of the convertible bonds)
(1,338,524)
Carrying amount of bonds payable (straight bond value) $ 13,103,887
(18) Long-term debts
December 31, 2009 December 31, 2010
NT$ NT$ US$
Citibank syndicated loan 12,200,000 12,200,000 418,812
Other bank loans 171,856 121,933 4,186
Less: current installments - (6,100,000) (209,406)
12,371,856 6,221,933 213,592
The Company entered into a syndicated loan agreement with Citibank, the managing bank of the syndicated
loan, on October 11, 2007, and the terms of this loan agreement were as follows:
December 31,
2009
December 31,
2010
Type of Loan Creditor Credit Line Term NT$ NT$
Unsecured
loan
Citibank
and other
banks
Term tranche of NT$16.5
billion; ve-year limit
during which revolving
credits disallowed
The original loan amounted to
NT$16.5 billion; an advance
repayment of NT$4.3 billion was
made in the rst quarter of 2008.
The loan is repayable in 4 semi-
annual installments starting from
April 2011.
12,200,000 12,200,000
Revolving tranche of
NT$3.3 billion; three-year
limit
One-time repayment in full in
October 2010. The Company did
not use this credit facility. - -
Less: current installment - (6,100,000)
12,200,000 6,100,000
The above syndicated loan bore interest at an average rate of 1.67% in 2009 and 1.55% in 2010. According
to the loan agreement, the Company is required to maintain certain financial ratios calculated based on
annual and semi-annual audited consolidated financial statements. If the Company fails to meet any of
the financial ratios, the managing bank will request the Company in writing to take action to improve
within agreed days. No assertion of breach of contract will be tenable if the nancial ratios are met within