Nanya Technology's board of directors has approved plans to issue up to 15 billion new shares through a private placement. Proceeds will be used to strengthen its capital structure and working capital, according to a company filing with the Taiwan Stock Exchange (TSE).

Based on Nanya's closing share price on the TSE on September 28, Nanya will be able to raise as much as NT$55.5 billion (US$1.8 billion) from the private share issue. Nanya closed at NT$3.70 on the day of the announcement.

The Formosa Plastics Group, Nanya's parent company, and affiliates of the group, are expected to subscribe to all the new shares, industry sources believe. Nanya's decision to directly raise funds without implementing a capital downsizing is aimed at shoring up the company's net value per share as soon as possible.

Nanya's stock has been downgraded by the TSE to requiring full-cash delivery as its first-half net value per share failed to meet the required NT$5 mark.

Nanya is looking to carry out the private placement by the end of 2011, the sources indicated.

Nanya is scheduled to hold a special shareholders meeting on November 17 to vote on the planned fundraiser.

Nanya previously revealed that the company is shifting its focus to server-use DRAM and mobile RAM chips, while reducing its reliance on PC DRAM. Sales of its non-PC DRAM products will account for 50% of company revenues by the end of 2011.