A China-based subsidiary of Taiwan-based Hon Hai Precision Industry, known as Foxconn on the global market, has invested 5.38 billion yuan (NT$23.9 billion or US$793.36 million) in Chinese chipmaker Tsinghua Unigroup through a private equity fund, the business conglomerate announced Thursday.
Shenzhen-based Foxconn Industrial Internet Co., which is listed on the Shanghai Stock Exchange, made the investment through Beijing Zhiguangxin Holding Co., a vehicle formed by a consortium led by investment firms, to expand the scope of the Taiwan conglomerate’s semiconductor business, Hon Hai said in a statement.
Beijing Zhiguangxin Holding has fully taken over Tsinghua Unigroup’s equity under a restructuring arrangement, according to the statement.
The debt-laden Tsinghua Unigroup, a vast conglomerate that was spun out of Tsinghua University in Beijing, completed its year-long debt-restructuring process on Monday, ending the company’s struggle to keep afloat some of China’s semiconductor operations.
Zhiguangxin’s major shareholders are mainly Chinese state-owned enterprises, according to Chinese media reports.
Foxconn Industrial Internet Co. holds a 99.99 percent stake in the newly formed Xingwei (Guangzhou) Industrial Investment Partnership Fund, which holds 48.91 percent of Shengyue (Guangzhou) Industrial Investment Partnership.
Shengyue holds about 20.04 percent of Beijing Zhiguangxin Holding, formed last year by Beijing Wise Road Capital, a private equity fund management firm, and its sister company Beijing Jianguang Asset Management Co, known as JAC Capital.
The transaction price was determined by Zhiguangxin and Beijing Wise Road Capital for the purpose of financial investment, according to the statement.
Previously, Chinese media reported that Foxconn Industrial Internet had invested 9.8 billion yuan in Zhiguangxin in a move deemed by the market to reflect the Hon Hai subsidiary’s ambition to expand its semiconductor business.
According to information posted by Foxconn Industrial Internet on its WeChat public account in June, it has so far acquired four semiconductor packaging and testing plants.
Source: Focus Taiwan News Channel