Royal Philips Electronics has sold US$1.08 billion worth of American depositary receipts (ADR) in Taiwan Semiconductor Manufacturing Company (TSMC), cutting its stake in the world's largest supplier of made-to-order chips to 19.1 per cent from 21.6 per cent. The Dutch consumer electronics maker sold 100 million ADRs, corresponding to 500 million common shares, at US$10.77 each in New York on Monday, Merrill Lynch spokesman Mark Tsang said. Merrill and Goldman Sachs were joint bookrunners for the deal. The sale came after Philips said last month it planned to cut its stake in TSMC by 2.5 percentage points as part of its efforts to reduce debt. Philips said it would receive gross proceeds of about 935 million euros (HK$8.34 billion) from the sale and book a non-taxable capital gain of about 700 million euros in its fourth-quarter earnings. The ADRs were priced level with the last trade on the New York Stock Exchange, contrary to the usual practice of issuing new shares at a discount to the market price. By comparison, the previous block sale of 79 million TSMC ADRs in early July was priced at a 0.67 per cent discount to the closing price of US$10.47 at the time. 'Demand for TSMC shares is usually very good as the company is delivering good margins and we are also at the initial phase of a pick-up in the global semiconductor industry,' said Chris Hsieh, an analyst with ING Financial Markets. On the negative side, he noted that the earnings per ADR would be diluted as a result of the conversion sale. The outstanding ADRs increased to approximately 14.5 per cent of the company's total share capital from approximately 12 per cent, according to TSMC. TSMC's shares fell 2.94 per cent to close at NT$66 yesterday.