KUALA LUMPUR – Dagang NeXchange Bhd (DNeX) and Beijing Integrated Circuit Advanced Manufacturing and High-End Equipment Equity Investment Fund Center (Limited Partnership) (CGP Fund) have signed a share sale and purchase agreement with Khazanah Nasional Bhd to take over loss-making semiconductor unit SilTerra Malaysia Sdn Bhd for RM273 million cash.
DNeX said in a statement today that under the agreement, the group will purchase a 60% equity interest in SilTerra for RM163.8 million, while CGP Fund will acquire the remaining 40% for RM109.2 million.
The purchase consideration for DNeX will be funded through a combination of proceeds to be raised from a proposed private placement, internally-generated funds and/or borrowings, the statement said.
DNeX and CGP Fund have also committed to a capital injection of at least RM200 million by way of subscribing for new ordinary shares to be allotted and issued by SilTerra.
“From the capital injection, approximately RM150 million will be mainly utilised as capital expenditure to upgrade SilTerra’s equipment and manufacturing capabilities in new technologies, with the remaining allocated for working capital. Based on DNeX’s 60% equity stake, the capital injection by DNeX shall amount to approximately RM120 million,” said DNeX.
The acquisition is expected to be completed by the end of the second quarter of 2021 with the capital injection expected to be within 180 days thereafter.
Upon completion of the proposed acquisition, contribution from SilTerra is expected to account for 25% or more of the group’s consolidated net profits and consolidated net assets moving forward.
DNeX has set a two-year time frame to turn around SilTerra and bring the company back to profitability.
SilTerra was established by the Malaysian government in 1995 as a strategic national interest to promote front-end semiconductor manufacturing and a catalyst for high technology investments in the country.
CGP Fund, on the other hand, was established as a private equity fund in 2014 focusing on the semiconductor industry in China, while Beijing CGP Investment Co Ltd is a private investment management company and a general partner and manager of CGP Fund. – The Vibes, March 31, 2021
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