UMC sells Novatek shares twice for NT$1.95 billion due to bond conversions

United Microelectronics Corporation (UMC) has announced the disposal of a significant portion of its holdings in Novatek Microelectronics Corp. The semiconductor foundry divested a total of 4,070 shares of Novatek stock across two separate transactions.

The first disposal involved 1,174,694 shares, announced on June 17, with a transaction price of NT$479.8 per share, totaling NT$564 million. The second, announced on June 18, involved 2,896,036 shares at the same price, amounting to NT$1.39 billion. In total, UMC sold shares worth approximately NT$1.95 billion.

UMC clarified that these sales were not a result of active market selling but were triggered by convertible bondholders exercising their rights to convert bonds into Novatek shares. The impact on UMC's retained earnings from these transactions is estimated at NT$386 million for the first sale and NT$1.01 billion for the second, with neither sale affecting the company's profit and loss.

Following these transactions, UMC retains 12,373,857 shares of Novatek, representing a 2.03% stake. This remaining holding is valued at approximately NT$5.91 billion. Novatek, which was spun off from UMC in 1997, has long been considered a key part of the "UMC family." However, UMC has since exited Novatek's board of directors, no longer holding any corporate representative seats.